[Congressional Record Volume 140, Number 92 (Friday, July 15, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 15, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                     LONG-TERM CARE IMPROVEMENT ACT

                                 ______


                         HON. OLYMPIA J. SNOWE

                                of maine

                    in the house of representatives

                        Thursday, July 14, 1994

  Ms. SNOWE. Mr. Speaker, long-term care means different things to 
different people. It means home health care for those who need some 
help, but do not require round the clock care. It means respite care so 
those families who are struggling to keep a loved one at home can have 
a short break and some time to themselves. And it means nursing home 
care for those in need of institutional services.
  As the floor debate on health care draws closer, it is important that 
we all remember that any major reform of our health care system will be 
incomplete if it does not address some of the problems facing our long-
term care system. I am introducing legislation today that addresses 
four areas that are in need of change: setting standards for private 
long-term care insurance; changing the Tax C ode to make insurance more 
affordable; providing respite care tax credits for family caregivers, 
and providing a tax credit to those who care for Alzheimer's victims at 
home.
  Private insurance coverage for long-term nursing home care is very 
limited with private insurance payments amounting to 1 percent of total 
spending for nursing home care in 1991. In 1986, approximately 30 
insurers were selling long-term care insurance policies of some type 
and an estimated 200,000 people were covered. As of December 1991, the 
Health Insurance Association of American [HIAA] found that more than 
2.4 million policies had been sold, with 135 insurers offering 
coverage.
  HIAA estimates that the long-term care policies paid $80 a day for 
nursing home care and $40 a day for home health care; they had lifetime 
5 percent compounded inflation protection, a 20-day deductible, period 
and a 4-year maximum coverage period. These policies had an average 
annual premium in December 1991 of $1,781 when purchased at the age of 
65 and $5,627 when purchased at the age of 79.

  We need to make sure that these policies are not only affordable, but 
that they guarantee the benefits they promise. The National Association 
of Insurance Commissioners [NAIC] has produced standards for long-term 
care policies which cover the spectrum of issues--from disclosure to 
clearly defining the benefits, cost and time period covered. The 
Federal Government should require that all States meet this standard in 
any long-term care policies sold in their States. My bill would put the 
NAIC standards into law.
  There is general agreement that we need to change the Tax Code to 
take away any disincentives to purchasing long-term care insurance. In 
addition, the change may encourage employers to offer long-term care 
policies as an optional benefit, as they would be able to deduct the 
cost, too. This bill will treat private long-term care insurance 
policies like accident and health insurance for tax purposes. It would 
also define a dependent as any parent or grandparent of the taxpayer 
for whom the taxpayer pays expenses for long-term care services. This 
change will allow children and grandchildren to deduct the long-term 
care expenses they pay. Current law requires that an individual must 
pay 51 percent of the expenses for a dependent before they can be 
deducted.
  Over 80 percent of disabled elderly persons receive care from their 
family members, most of whom are their wives, daughters, or daughters-
in-law. Family caregivers provide between 80 and 90 percent of the 
medical care, household maintenance, transportation, and shopping 
needed by older persons. Numerous studies have found that family 
caregivers give up their jobs, have reduced their working hours or have 
rejected promotions in order to provide long-term care to loved ones.

  My bill will expand the dependent care tax credit to make it 
applicable for respite care expenses and make the credit refundable. A 
respite care credit would be allowed for up to $1,200 for one 
qualifying dependent and $2,400 for two qualifying dependents, This 
money could go, for example, toward hiring an attendant for an elderly 
dependent during the work day, or for admittance to an adult day care 
center. The credit for respite care expenses would be available 
regardless of the caregiver's employment status.
  Such a respite care credit will save dollars for both caregiving 
families and the Government by postponing, or even avoiding, expensive 
institutionalization.
  Finally, this legislation will provide tax deductions from gross 
income for individual taxpayers who maintain a household which includes 
a dependent who has Alzheimer's disease or a related disorder. It would 
allow deductions of expenses, other than medical, which are related to 
the home health care, adult day care and respite care of an Alzheimer's 
victim.
  In most cases of Alzheimer's disease, families will bear the brunt of 
the responsibility of care. Many caregivers of dementia victims spend 
more than 40 hours a week in direct personal care. These families are 
trying to cope with the needs of a dependent older Alzheimer's victim 
with little or no financial or professional help.
  In the face of the continued and intense involvement of the family 
caregiver, services that provide respite from the ongoing pressures of 
care become essential in the caregivers' ability to support the 
Alzheimer's victim at home. Home health care, adult day care and long-
term respite care all provide opportunities to free caregivers from 
their caregiving responsibility and are crucial in enabling employed 
caregivers to continue working. Most caregivers willingly provide care 
for dependent and frail elderly family members. Even so, the presence 
of these supportive services can be a crucial factor in continued 
caregiving activities.

  It is important to provide some tax relief for those expenses related 
to their continued care in the home. Perhaps by such action we can 
delay the institutionalization of dementia victims. Surely we can 
provide financial relief to their caregivers.
  I urge my colleagues to join me in supporting this bill and in 
supporting the inclusion of changes in our long-term care system in 
whatever health care reform package we send to the President.

                          ____________________