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| PRESIDENT CLINTON ENACTS LEGISLATION TO PROVIDE LONG-TERM CARE |
| INSURANCE TO FEDERAL WORKERS |
| Urges the Congress to Act Now to Assist All Families with Long-Term |
| Care Needs |
| September 19, 2000 |
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Today, President Clinton will sign into law the Long Term Care Security
Act, which authorizes the Office of Personnel Management (OPM) to negotiate
with private insurers to offer more affordable, high-quality, long-term
care insurance policies to Federal employees, retirees, and their families.
This initiative will provide a new insurance option to 13 million
Americans, and will serve as a model program for private employers
throughout the nation. The President will also urge the Congress to take
additional legislative steps this fall to provide assistance to the
millions of Americans of all ages who currently have extraordinary unmet
long-term care needs and who can not purchase private long-term care
policies at any price. Specifically, he will call on the Congress to pass
his $3,000 tax credit for the chronically ill; to reauthorize and
strengthen the Older Americans Act by adding a new caregivers initiative;
and to pass a long-overdue and voluntary Medicare prescription drug
benefit.
MILLIONS OF AMERICANS HAVE LONG-TERM CARE NEEDS
? An increasing number of Americans have a range of long-term care needs.
Over five million Americans have significant limitations due to illness or
disability and thus require long-term care. Approximately, two-thirds are
older Americans. Also, millions of adults and a growing number of children
have long-term care needs because of health condition from birth or a
chronic illness developed later in life.
? The aging of Americans will only increase the need for quality long-term
care options. The number of Americans age 65 years or older will double by
2030 (from 34.3 to 70 million), so that one in five Americans will be
elderly. The number of people 85 years or older, nearly half of whom need
assistance with everyday activities, will grow even faster ? from
approximately 4 million to 9 million.
? Families, who are the primary caregivers for people with long-term care
needs, pay a big price for this care. Although it is difficult to
quantify, one study found that the economic value of care giving for
families ranges from $4,800 to $10,400 per caregiver. As such, this new
$3,000 tax credit could cover up to 60 percent of families? costs. In
addition, not only are caregiving responsibilities expensive, they can be
physically demanding and psychologically exhausting.
ENACTING NEW LONG-TERM CARE INSURANCE OPTION FOR FEDERAL EMPLOYEES. The
legislation President Clinton will sign today, the Long Term Care Security
Act (HR 4040), provides the 13 million Federal employees, retirees, and
their families with a new option to purchase non-subsidized, quality
private long-term care insurance. The new insurance options will cover a
range of services at group rates, including home health care, adult day
care, and nursing home care. This legislation allows OPM to use its
purchasing power to negotiate savings of 15 to 20 percent on commercial
long-term care insurance rates and to ensure that such products meet high
quality standards. It will establish the Federal government as a model
employer and provide private-sector companies with a model for offering
quality long-term care insurance. Because employers are only beginning to
learn how to provide these benefits to their workers, only about 4 million
Americans ? 1.5 percent of all Americans ? have private long-term care
insurance. OPM anticipates that approximately 300,000 Federal employees
will participate in this program.
CHALLENGING THE CONGRESS TO PASS INITIATIVES TO HELP AMERICANS WHO NEED
LONG-TERM CARE ASSISTANCE NOW. The Administration?s long-term care
initiative, unveiled by President Clinton and Vice President Gore, First
Lady Hillary Rodham Clinton and Tipper Gore, includes:
? Supporting people with long-term care needs and their families through a
$3,000 tax credit. This initiative acknowledges and supports millions of
Americans with long-term care needs or the family members who care for and
house their ill or disabled relatives through a phased in $3,000 tax
credit. This new tax credit supports the diverse needs of families by
compensating a wide range of formal or informal long-term care for people
of all ages with three or more limitations in activities of daily living
(ADLs) or a comparable cognitive impairment. It would provide needed
financial support to about 2 million Americans, including 1.2 million older
Americans, over 500,000 non-elderly adults, and approximately 250,000
children per year. This credit would be phased in beginning with $1,000 in
2001 and rising in $500 increments, so eligible people would receive $3,000
in 2005 and thereafter. The credit would be phased out beginning at
$110,000 for couples and $75,000 for unmarried taxpayers. It costs about
$8.8 billion over five years and $26.6 billion over 10 years.
? Reauthorizing and strengthening the Older Americans Act (OAA) to assist
family caregivers of seniors. For more than 35 years, the OAA has helped
millions of seniors lead more independent lives by enabling communities to
offer them vital, everyday basics like transportation and meals-on-wheels.
Today, President Clinton will urge the Congress to reauthorize the OAA and
strengthen it by funding our Family Caregivers Program. This nationwide
program would support families who care for elderly relatives with chronic
illnesses or disabilities by enabling states to utilize a visible, reliable
network to provide quality respite care and other support services. This
program, which costs more than $1.25 billion over 10 years, would assist
approximately 250,000 families nationwide. Recent studies have found that
services like respite care can relieve caregiver stress and delay nursing
home entry, and that support for families of Alzheimer?s patients can delay
institutionalization for up to a year.
? Passing a new, voluntary Medicare prescription drug benefit. Older
Americans who lack prescription drug coverage have been found to become
institutionalized at twice the rate of those seniors with prescription drug
coverage. In addition, this population requires and utilizes a much
greater proportion of medications to manage and treat chronic conditions.
For this reason, a meaningful, affordable, voluntary Medicare prescription
drug benefit is a critical component of an effective long-term care
strategy.
BUILDS ON THE NEW NURSING HOME INITIATIVE RECENTLY UNVEILED BY THE
CLINTON-GORE ADMINISTRATION. Today?s announcement builds on President
Clinton?s recent action to improve nursing home quality nationwide. The
initiative: (1) invests $1 billion over 5 years in a new grant program to
increase staffing levels nationwide and improve quality of nursing home
care; (2) imposes immediate penalties on nursing facilities placing
residents at risk and reinvests these funds in the new grant program; (3)
directs the Health Care Financing Administration to establish national
minimum staffing requirements and complete recommendations for appropriate
reimbursement within two years; (4) helps families make informed decisions
by providing accurate information on staffing levels; and (5) launches a
new campaign to identify and prevent unintended weight loss and dehydration
among nursing home residents.
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