[Congressional Record Volume 144, Number 105 (Thursday, July 30, 1998)]
[Extensions of Remarks]
[Pages E1466-E1467]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               THE LONG TERM CARE ADVANCEMENT ACT OF 1998

                                 ______
                                 

                       HON. CHRISTOPHER H. SMITH

                             of new jersey

                    in the house of representatives

                        Wednesday, July 29, 1998

  Mr. SMITH of New Jersey. Mr. Speaker, the aging of the Baby Boom 
generation has been extensively discussed in Congress and among the 
American people, with particular attention to the impact on Social 
Security and Medicare.
  What has not been widely discussed, however, is a related but very 
distinct trend: the rapid expansion of the group of Americans defined 
by the Bureau of the Census as ``the oldest old''--those senior 
citizens aged 85 and above. Often lost during discussions of the Baby 
Boom generation is the fact that the fastest growing demographic age 
group in the United States is the ``oldest old.''
  That is why I am introducing legislation, joined by my colleagues 
Phil English (PA), Ron Paul (TX), John Ensign (NV), and Chris Shays 
(CT) to help Americans better prepare themselves and their families for 
their long term health care needs of the future. The tax breaks 
contained in this legislation will go a long way towards providing 
families with peace and security against the massive costs of 
professionally provided long term care, including nursing home care, 
home health care, and adult day care services.
  I am pleased that this legislation has already secured the support of 
the 60 Plus Association and the Home Health Assembly of New Jersey. The 
Health Insurance Association of America (HIAA) has also endorsed the 
concept behind the bill.
  Our Nation will soon be grappling with a long term care crisis unless 
Congress acts now to prevent it. From 1960 through 1994, the senior 
citizen population (age 85+) increased by 274 percent. And the number 
of Americans in the 85+ age cohort is expected to double in size by the 
year 2020, reaching 7 million. The number of senior citizens between 
the ages of 75 and 84 will reach nearly 15.5 million by 2020. The sixty 
four thousand dollar question is: how will we as a nation meet our 
parents' and grandparents' long-term care need?
  This demographic change will put an enormous strain on our nation's 
fragmented system of long-term care. Already, our Medicaid program has 
demonstrated its financial shortcomings when providing long-term care 
services to increasing numbers of the frail elderly. The Medicaid 
program already spends over $40 billion on long term care services for 
senior citizens. These expenditures are projected to double over the 
next 10 years.
  A vital part of any comprehensive response to these trends must be 
the promotion of private long term care insurance (LTC) for Americans. 
Although the number of persons insured under LTC policies has nearly 
doubled between 1992 and 1996, this growth is from a very low base. The 
fact of the matter is that the overwhelming majority of Americans still 
do not have any private LTC insurance coverage at all. This needs to 
change, and soon.
  Mr. Speaker, the Long Term Care Advancement Act of 1998 will assist 
Americans prepare for their future long term care needs. My bill will 
allow penalty-free withdrawal from IRAs and 401 (k) plans when the 
funds are used to pay for `qualified' LTC insurance premiums (as 
defined by the Health Insurance Portability and Accountability Act of 
1996).
  In addition, a certain portion of the IRA/401 (k) withdrawals used 
for LTC will be excluded from taxable income. Depending on one's tax 
bracket, age, and type of policy purchased, the savings on a long term 
care insurance policy under my bill are considerable, and could range 
from 15 to 25 percent.
  Lastly, the Long Term Care Advancement Act will provide a refundable 
$500 tax credit for families caring for a dependent elderly

[[Page E1467]]

spouse or parent in the home. This tax credit is important because most 
of the long term care provided in America is provided by families in 
the home, and these families desperately need and deserve tax relief.
  By encouraging more Americans to plan for their future care needs I 
believe we can improve the medical, social, and financial well being of 
families, as well as provide substantial future savings to the Medicaid 
and Medicare programs. According to the John Hancock Mutual Life 
Insurance Company, there is a 48% chance of any given individual of 
needing long term care in one's lifetime. And the costs of nursing home 
care for one year is approximately $40,000. The potential for savings 
to American families, as well as the Medicaid and Medicare programs, by 
encouraging families to purchase LTC insurance is simply enormous.
  I look forward to working on and discussing long term care issues 
with my colleagues during the remainder of the 105th Congress, and urge 
all of my colleagues to support this important initiative.

                          ____________________