[Congressional Record Volume 141, Number 34 (Thursday, February 23, 1995)]
[Senate]
[Pages S3065-S3066]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                         ADDITIONAL STATEMENTS

                                 ______


              LONG-TERM CARE FAMILY PROTECTION ACT OF 1995

 Mr. COHEN. Mr. President, last week I introduced legislation 
aimed at improving access to affordable long-term care services. This 
bill allows families with exorbitant health care bills to deduct long-
term care costs as medical expenses, creates incentives for older 
Americans and their families to plan for future long-term care 
expenses, and removes tax barriers that stifle the private long-term 
care insurance market.
  Henry David Thoreau once wrote that ``If you have built castles in 
the air, your work need not be lost; that is where they should be. Now 
put the foundations under them.''
  Each day Americans, quite unknowingly, heed Thoreau's advice as they 
work to safeguard their families, their homes, and their dreams from 
the precarious circumstances life may hand them from time to time. As 
he suggests, we work not only to build our castles, but strive to 
protect them once they are built.
  Unfortunately, most of us have not adequately protected ourselves and 
our families from one of the most devastating financial risks that 
could face us in our entire lifetime--the need for long-term care 
services.
  While approximately 38 million people lack basic health insurance, 
almost every American family is exposed to the catastrophic costs of 
long-term care. In fact, less than 3 percent of all Americans have 
insurance to cover long-term care. With average nursing home costs 
nearing $40,000 per year and home health care costing from $50 to $200 
per day, long-term care expenses can quickly wipe out the lifetime 
savings of a disabled individual and his or her family.
  Sadly, many families erroneously assume that their current insurance 
or Medicare will cover long-term care expenses. It is only when a 
loved-one becomes disabled that they discover coverage is limited to 
acute medical care and that long nursing home stays and extended home 
care services must be paid for out-of-pocket. In fact, a 1994 public 
opinion poll conducted for the Employee Benefit Research Institute 
found that 45 percent of all respondents believe that Medicare pays for 
long-term care, when in fact it does not.
  And despite what many of us believe, the chance of needing long-term 
care is significant and increasing as life expectancies increase. In 
1990 for example, people age 65 or older faced a 43-percent risk of 
entering a nursing home. About 1 in 5 of those seniors are estimated to 
be in a nursing home stay over 1 year, about 1 in 10 would be in a 
facility for 5 years or longer and many more would receive caregiving 
from friends, families, and home care workers.
  As chairman of the Senate Special Committee on Aging, I know the 
obstacles many disabled older Americans and their families face paying 
for necessary long-term care. Despite heroic caregiving efforts by 
spouses, children, and friends, many disabled Americans do not receive 
the appropriate medical and social services they desperately need. 
Families are literally torn apart or pushed to the brink of financial 
disaster due to the overwhelming costs of long-term care.
  This lack of protection pulls the rug out from under hard working 
families at a time when they are in their greatest need. Growing frail 
or learning to function with severe disabilities is a formidable task 
in itself. Yet this is only half the battle for an uninsured older 
American--since at the same time they must face huge financial burdens 
posed by long-term care.
  The legislation levels the playing field between acute and long-term 
care services, and provides all Americans with incentives to purchase 
protection against the risk of catastrophic long-term care expenses. As 
healthy and as independent as we may want to stay, 
[[Page S3066]]  the fountain of youth has yet to be discovered.
  We are all vulnerable to diseases such as Alzheimer's
   Parkinson's, and osteoporosis that can leave us mentally or 
physically disabled. We must accept the risk of needing long-term care 
and consider it in our normal retirement planning.

  This bill encourages personal responsibility and makes it easier for 
individuals to plan for their future long-term care needs. It provides 
important tax incentives for the purchase of long-term care insurance 
and places consumer protections on long-term care insurance policies so 
quality products will be affordable and accessible to more Americans.
  It allows States to develop programs under which individuals can keep 
more of their assets and still qualify for Medicaid if they take steps 
to finance their own long-term care needs, allows individuals to make 
tax free withdrawals from their individual retirement accounts without 
penalty if they purchase private long-term care insurance, and provides 
for consumer education to help families decide how to best plan for 
their own particular circumstances.
  Stimulating the private market through tax incentives and asset 
protection programs is a long-term investment in reducing Americans' 
reliance on Medicaid, and other Federal and State entitlements. Just as 
employer-sponsored health insurance got a boost after Congress exempted 
employers' payments for health insurance from corporate taxes, the 
long-term care market needs a major boost if we are seriously going to 
encourage individuals to provide for their own long-term care needs.
  Last year Congress was involved in an exhausting debate over how to 
reform our entire health care system. To my great disappointment, that 
debate did not yield legislation that could be passed on a bipartisan 
basis. Instead we fought an all or nothing battle for health care 
reform that left the American public no better off than when we began.
  Long-term care reform was one of the victims of this all or nothing 
strategy. Several bills contained provisions to establish a non-means-
tested long-term care program that would have cost taxpayers over $48 
billion. While the program would have certainly provided necessary 
long-term care services to many families, it was simply unrealistic to 
build a large publicly funded program at a time when we were trying to 
balance the budget. Furthermore, creating a non-means-tested program 
would have only strengthened the misconception that the Government will 
pay for long-term care and that there is little need to purchase 
protection.
  As Abraham Lincoln once cautioned, ``We must not promise what we 
ought not, lest we be called on to perform what we cannot.''
  The provisions included in the long-term care reform bill I am 
introducing today are not only reasonable, but enjoy strong bipartisan 
support. They were included in almost every health care bill introduced 
last year and are an important part of the Senior's Equity Act in the 
House Republican Contract With America.
  A strong private long-term care market will not only give individuals 
greater financial security for their future, but will ease the 
financial burden on the Federal Government for years to come, as our 
population ages and more elderly persons require long-term care.
  I strongly urge my colleagues to cosponsor this legislation which 
will improve the financial security of older Americans and their 
families both now and in the future. 


                          ____________________