[Congressional Record Volume 146, Number 56 (Tuesday, May 9, 2000)]
[House]
[Pages H2667-H2675]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
LONG-TERM CARE SECURITY ACT
Mr. SCARBOROUGH. Mr. Speaker, I move to suspend the rules and pass
the
[[Page H2668]]
bill (H.R. 4040) to amend title 5, United States Code, to provide for
the establishment of a program under which long-term care insurance is
made available to Federal employees, members of the uniformed services,
and civilian and military retirees, and for other purposes, as amended.
The Clerk read as follows:
H.R. 4040
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Long-Term Care Security
Act''.
SEC. 2. LONG-TERM CARE INSURANCE.
(a) In General.--Subpart G of part III of title 5, United
States Code, is amended by adding at the end the following:
``CHAPTER 90--LONG-TERM CARE INSURANCE
``Sec.
``9001. Definitions.
``9002. Availability of insurance.
``9003. Contracting authority.
``9004. Financing.
``9005. Preemption.
``9006. Studies, reports, and audits.
``9007. Jurisdiction of courts.
``9008. Administrative functions.
``9009. Cost accounting standards.
``Sec. 9001. Definitions
For purposes of this chapter:
``(1) Employee.--The term `employee' means--
``(A) an employee as defined by section 8901(1); and
``(B) an individual described in section 2105(e);
but does not include an individual employed by the government
of the District of Columbia.
``(2) Annuitant.--The term `annuitant' has the meaning such
term would have under paragraph (3) of section 8901 if, for
purposes of such paragraph, the term `employee' were
considered to have the meaning given to it under paragraph
(1) of this subsection.
``(3) Member of the uniformed services.--The term `member
of the uniformed services' means a member of the uniformed
services, other than a retired member of the uniformed
services, who is--
``(A) on active duty or full-time National Guard duty for a
period of more than 30 days; and
``(B) a member of the Selected Reserve.
``(4) Retired member of the uniformed services.--The term
`retired member of the uniformed services' means a member or
former member of the uniformed services entitled to retired
or retainer pay, including a member or former member retired
under chapter 1223 of title 10 who has attained the age of 60
and who satisfies such eligibility requirements as the Office
of Personnel Management prescribes under section 9008.
``(5) Qualified relative.--The term `qualified relative'
means each of the following:
``(A) The spouse of an individual described in paragraph
(1), (2), (3), or (4).
``(B) A parent, stepparent, or parent-in-law of an
individual described in paragraph (1) or (3).
``(C) A child (including an adopted child, a stepchild, or,
to the extent the Office of Personnel Management by
regulation provides, a foster child) of an individual
described in paragraph (1), (2), (3), or (4), if such child
is at least 18 years of age.
``(D) An individual having such other relationship to an
individual described in paragraph (1), (2), (3), or (4) as
the Office may by regulation prescribe.
``(6) Eligible individual.--The term `eligible individual'
refers to an individual described in paragraph (1), (2), (3),
(4), or (5).
``(7) Qualified carrier.--The term `qualified carrier'
means an insurance company (or consortium of insurance
companies) that is licensed to issue long-term care insurance
in all States, taking any subsidiaries of such a company into
account (and, in the case of a consortium, considering the
member companies and any subsidiaries thereof, collectively).
``(8) State.--The term `State' includes the District of
Columbia.
``(9) Qualified long-term care insurance contract.--The
term `qualified long-term care insurance contract' has the
meaning given such term by section 7702B of the Internal
Revenue Code of 1986.
``(10) Appropriate secretary.--The term `appropriate
Secretary' means--
``(A) except as otherwise provided in this paragraph, the
Secretary of Defense;
``(B) with respect to the Coast Guard when it is not
operating as a service of the Navy, the Secretary of
Transportation;
``(C) with respect to the commissioned corps of the
National Oceanic and Atmospheric Administration, the
Secretary of Commerce; and
``(D) with respect to the commissioned corps of the Public
Health Service, the Secretary of Health and Human Services.
``Sec. 9002. Availability of insurance
``(a) In General.--The Office of Personnel Management shall
establish and, in consultation with the appropriate
Secretaries, administer a program through which an individual
described in paragraph (1), (2), (3), (4), or (5) of section
9001 may obtain long-term care insurance coverage under this
chapter for such individual.
``(b) General Requirements.--Long-term care insurance may
not be offered under this chapter unless--
``(1) the only coverage provided is under qualified long-
term care insurance contracts; and
``(2) each insurance contract under which any such coverage
is provided is issued by a qualified carrier.
``(c) Documentation Requirement.--As a condition for
obtaining long-term care insurance coverage under this
chapter based on one's status as a qualified relative, an
applicant shall provide documentation to demonstrate the
relationship, as prescribed by the Office.
``(d) Underwriting Standards.--
``(1) Disqualifying condition.--Nothing in this chapter
shall be considered to require that long-term care insurance
coverage be made available in the case of any individual who
would be eligible for benefits immediately.
``(2) Spousal parity.--For the purpose of underwriting
standards, a spouse of an individual described in paragraph
(1), (2), (3), or (4) of section 9001 shall, as nearly as
practicable, be treated like that individual.
``(3) Guaranteed issue.--Nothing in this chapter shall be
considered to require that long-term care insurance coverage
be guaranteed to an eligible individual.
``(4) Requirement that contract be fully insured.--In
addition to the requirements otherwise applicable under
section 9001(9), in order to be considered a qualified long-
term care insurance contract for purposes of this chapter, a
contract must be fully insured, whether through reinsurance
with other companies or otherwise.
``(5) Higher standards allowable.--Nothing in this chapter
shall, in the case of an individual applying for long-term
care insurance coverage under this chapter after the
expiration of such individual's first opportunity to enroll,
preclude the application of underwriting standards more
stringent than those that would have applied if that
opportunity had not yet expired.
``(e) Guaranteed Renewability.--The benefits and coverage
made available to eligible individuals under any insurance
contract under this chapter shall be guaranteed renewable (as
defined by section 7A(2) of the model regulations described
in section 7702B(g)(2) of the Internal Revenue Code of 1986),
including the right to have insurance remain in effect so
long as premiums continue to be timely made. However, the
authority to revise premiums under this chapter shall be
available only on a class basis and only to the extent
otherwise allowable under section 9003(b).
``Sec. 9003. Contracting authority
``(a) In General.--The Office of Personnel Management
shall, without regard to section 5 of title 41 or any other
statute requiring competitive bidding, contract with 1 or
more qualified carriers for a policy or policies of long-term
care insurance. The Office shall ensure that each resulting
contract (hereinafter in this chapter referred to as a
`master contract') is awarded on the basis of contractor
qualifications, price, and reasonable competition.
``(b) Terms and Conditions.--
``(1) In general.--Each master contract under this chapter
shall contain--
``(A) a detailed statement of the benefits offered
(including any maximums, limitations, exclusions, and other
definitions of benefits);
``(B) the premiums charged (including any limitations or
other conditions on their subsequent adjustment);
``(C) the terms of the enrollment period; and
``(D) such other terms and conditions as may be mutually
agreed to by the Office and the carrier involved, consistent
with the requirements of this chapter.
``(2) Premiums.--Premiums charged under each master
contract entered into under this section shall reasonably and
equitably reflect the cost of the benefits provided, as
determined by the Office. The premiums shall not be adjusted
during the term of the contract unless mutually agreed to by
the Office and the carrier.
``(3) Nonrenewability.--Master contracts under this chapter
may not be made automatically renewable.
``(c) Payment of Required Benefits; Dispute Resolution.--
``(1) In general.--Each master contract under this chapter
shall require the carrier to agree--
``(A) to provide payments or benefits to an eligible
individual if such individual is entitled thereto under the
terms of the contract; and
``(B) with respect to disputes regarding claims for
payments or benefits under the terms of the contract--
``(i) to establish internal procedures designed to
expeditiously resolve such disputes; and
``(ii) to establish, for disputes not resolved through
procedures under clause (i), procedures for 1 or more
alternative means of dispute resolution involving independent
third-party review under appropriate circumstances by
entities mutually acceptable to the Office and the carrier.
``(2) Eligibility.--A carrier's determination as to whether
or not a particular individual is eligible to obtain long-
term care insurance coverage under this chapter shall be
subject to review only to the extent and in the manner
provided in the applicable master contract.
[[Page H2669]]
``(3) Other claims.--For purposes of applying the Contract
Disputes Act of 1978 to disputes arising under this chapter
between a carrier and the Office--
``(A) the agency board having jurisdiction to decide an
appeal relative to such a dispute shall be such board of
contract appeals as the Director of the Office of Personnel
Management shall specify in writing (after appropriate
arrangements, as described in section 8(c) of such Act); and
``(B) the district courts of the United States shall have
original jurisdiction, concurrent with the United States
Court of Federal Claims, of any action described in section
10(a)(1) of such Act relative to such a dispute.
``(4) Rule of construction.--Nothing in this chapter shall
be considered to grant authority for the Office or a third-
party reviewer to change the terms of any contract under this
chapter.
``(d) Duration.--
``(1) In general.--Each master contract under this chapter
shall be for a term of 7 years, unless terminated earlier by
the Office in accordance with the terms of such contract.
However, the rights and responsibilities of the enrolled
individual, the insurer, and the Office (or duly designated
third-party administrator) under such contract shall continue
with respect to such individual until the termination of
coverage of the enrolled individual or the effective date of
a successor contract thereto.
``(2) Exception.--
``(A) Shorter duration.--In the case of a master contract
entered into before the end of the period described in
subparagraph (B), paragraph (1) shall be applied by
substituting `ending on the last day of the 7-year period
described in paragraph (2)(B)' for `of 7 years'.
``(B) Definition.--The period described in this
subparagraph is the 7-year period beginning on the earliest
date as of which any long-term care insurance coverage under
this chapter becomes effective.
``(3) Congressional notification.--No later than 180 days
after receiving the second report required under section
9006(c), the President (or his designee) shall submit to the
Committees on Government Reform and on Armed Services of the
House of Representatives and the Committees on Governmental
Affairs and on Armed Services of the Senate, a written
recommendation as to whether the program under this chapter
should be continued without modification, terminated, or
restructured. During the 180-day period following the date on
which the President (or his designee) submits the
recommendation required under the preceding sentence, the
Office of Personnel Management may not take any steps to
rebid or otherwise contract for any coverage to be available
at any time following the expiration of the 7-year period
described in paragraph (2)(B).
``(4) Full portability.--Each master contract under this
chapter shall include such provisions as may be necessary to
ensure that, once an individual becomes duly enrolled, long-
term care insurance coverage obtained by such individual
pursuant to that enrollment shall not be terminated due to
any change in status (such as separation from Government
service or the uniformed services) or ceasing to meet the
requirements for being considered a qualified relative
(whether as a result of dissolution of marriage or
otherwise).
``Sec. 9004. Financing
``(a) In General.--Each eligible individual obtaining long-
term care insurance coverage under this chapter shall be
responsible for 100 percent of the premiums for such
coverage.
``(b) Withholdings.--
``(1) In general.--The amount necessary to pay the premiums
for enrollment may--
``(A) in the case of an employee, be withheld from the pay
of such employee;
``(B) in the case of an annuitant, be withheld from the
annuity of such annuitant;
``(C) in the case of a member of the uniformed services
described in section 9001(3), be withheld from the pay of
such member; and
``(D) in the case of a retired member of the uniformed
services described in section 9001(4), be withheld from the
retired pay or retainer pay payable to such member.
``(2) Voluntary withholdings for qualified relatives.--
Withholdings to pay the premiums for enrollment of a
qualified relative may, upon election of the appropriate
eligible individual (described in section 9001(1)-(4)), be
withheld under paragraph (1) to the same extent and in the
same manner as if enrollment were for such individual.
``(c) Direct Payments.--All amounts withheld under this
section shall be paid directly to the carrier.
``(d) Other Forms of Payment.--Any enrollee who does not
elect to have premiums withheld under subsection (b) or whose
pay, annuity, or retired or retainer pay (as referred to in
subsection (b)(1)) is insufficient to cover the withholding
required for enrollment (or who is not receiving any regular
amounts from the Government, as referred to in subsection
(b)(1), from which any such withholdings may be made, and
whose premiums are not otherwise being provided for under
subsection (b)(2)) shall pay an amount equal to the full
amount of those charges directly to the carrier.
``(e) Separate Accounting Requirement.--Each carrier
participating under this chapter shall maintain records that
permit it to account for all amounts received under this
chapter (including investment earnings on those amounts)
separate and apart from all other funds.
``(f) Reimbursements.--
``(1) Reasonable initial costs.--
``(A) In general.--The Employees' Life Insurance Fund is
available, without fiscal year limitation, for reasonable
expenses incurred by the Office of Personnel Management in
administering this chapter before the start of the 7-year
period described in section 9003(d)(2)(B), including
reasonable implementation costs.
``(B) Reimbursement requirement.--Such Fund shall be
reimbursed, before the end of the first year of that 7-year
period, for all amounts obligated or expended under
subparagraph (A) (including lost investment income). Such
reimbursement shall be made by carriers, on a pro rata basis,
in accordance with appropriate provisions which shall be
included in master contracts under this chapter.
``(2) Subsequent costs.--
``(A) In general.--There is hereby established in the
Employees' Life Insurance Fund a Long-Term Care
Administrative Account, which shall be available to the
Office, without fiscal year limitation, to defray reasonable
expenses incurred by the Office in administering this chapter
after the start of the 7-year period described in section
9003(d)(2)(B).
``(B) Reimbursement requirement.--Each master contract
under this chapter shall include appropriate provisions under
which the carrier involved shall, during each year, make such
periodic contributions to the Long-Term Care Administrative
Account as necessary to ensure that the reasonable
anticipated expenses of the Office in administering this
chapter during such year (adjusted to reconcile for any
earlier overestimates or underestimates under this
subparagraph) are defrayed.
``Sec. 9005. Preemption
``The terms of any contract under this chapter which relate
to the nature, provision, or extent of coverage or benefits
(including payments with respect to benefits) shall supersede
and preempt any State or local law, or any regulation issued
thereunder, which relates to long-term care insurance or
contracts.
``Sec. 9006. Studies, reports, and audits
``(a) Provisions Relating to Carriers.--Each master
contract under this chapter shall contain provisions
requiring the carrier--
``(1) to furnish such reasonable reports as the Office of
Personnel Management determines to be necessary to enable it
to carry out its functions under this chapter; and
``(2) to permit the Office and representatives of the
General Accounting Office to examine such records of the
carrier as may be necessary to carry out the purposes of this
chapter.
``(b) Provisions Relating to Federal Agencies.--Each
Federal agency shall keep such records, make such
certifications, and furnish the Office, the carrier, or both,
with such information and reports as the Office may require.
``(c) Reports by the General Accounting Office.--The
General Accounting Office shall prepare and submit to the
President, the Office of Personnel Management, and each House
of Congress, before the end of the third and fifth years
during which the program under this chapter is in effect, a
written report evaluating such program. Each such report
shall include an analysis of the competitiveness of the
program, as compared to both group and individual coverage
generally available to individuals in the private insurance
market. The Office shall cooperate with the General
Accounting Office to provide periodic evaluations of the
program.
``Sec. 9007. Jurisdiction of courts
``The district courts of the United States have original
jurisdiction of a civil action or claim described in
paragraph (1) or (2) of section 9003(c), after such
administrative remedies as required under such paragraph (1)
or (2) (as applicable) have been exhausted, but only to the
extent judicial review is not precluded by any dispute
resolution or other remedy under this chapter.
``Sec. 9008. Administrative functions
``(a) In General.--The Office of Personnel Management shall
prescribe regulations necessary to carry out this chapter.
``(b) Enrollment Periods.--The Office shall provide for
periodic coordinated enrollment, promotion, and education
efforts in consultation with the carriers.
``(c) Consultation.--Any regulations necessary to effect
the application and operation of this chapter with respect to
an eligible individual described in paragraph (3) or (4) of
section 9001, or a qualified relative thereof, shall be
prescribed by the Office in consultation with the appropriate
Secretary.
``(d) Informed Decisionmaking.--The Office shall ensure
that each eligible individual applying for long-term care
insurance under this chapter is furnished the information
necessary to enable that individual to evaluate the
advantages and disadvantages of obtaining long-term care
insurance under this chapter, including the following:
``(1) The principal long-term care benefits and coverage
available under this chapter, and how those benefits and
coverage compare to the range of long-term care benefits and
coverage otherwise generally available.
``(2) Representative examples of the cost of long-term
care, and the sufficiency of the
[[Page H2670]]
benefits available under this chapter relative to those
costs. The information under this paragraph shall also
include--
``(A) the projected effect of inflation on the value of
those benefits; and
``(B) a comparison of the inflation-adjusted value of those
benefits to the projected future costs of long-term care.
``(3) Any rights individuals under this chapter may have to
cancel coverage, and to receive a total or partial refund of
premiums. The information under this paragraph shall also
include--
``(A) the projected number or percentage of individuals
likely to fail to maintain their coverage (determined based
on lapse rates experienced under similar group long-term care
insurance programs and, when available, this chapter); and
``(B)(i) a summary description of how and when premiums for
long-term care insurance under this chapter may be raised;
``(ii) the premium history during the last 10 years for
each qualified carrier offering long-term care insurance
under this chapter; and
``(iii) if cost increases are anticipated, the projected
premiums for a typical insured individual at various ages.
``(4) The advantages and disadvantages of long-term care
insurance generally, relative to other means of accumulating
or otherwise acquiring the assets that may be needed to meet
the costs of long-term care, such as through tax-qualified
retirement programs or other investment vehicles.
``Sec. 9009. Cost accounting standards
``The cost accounting standards issued pursuant to section
26(f) of the Office of Federal Procurement Policy Act (41
U.S.C. 422(f)) shall not apply with respect to a long-term
care insurance contract under this chapter.''.
(b) Conforming Amendment.--The analysis for part III of
title 5, United States Code, is amended by adding at the end
of subpart G the following:
``90. Long-Term Care Insurance.................................9001.''.
SEC. 3. EFFECTIVE DATE.
The Office of Personnel Management shall take such measures
as may be necessary to ensure that long-term care insurance
coverage under title 5, United States Code, as amended by
this Act, may be obtained in time to take effect not later
than the first day of the first applicable pay period of the
first fiscal year which begins after the end of the 18-month
period beginning on the date of enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Florida (Mr. Scarborough) and the gentleman from Maryland (Mr.
Cummings) each will control 20 minutes.
The Chair recognizes the gentleman from Florida (Mr. Scarborough).
General Leave
Mr. SCARBOROUGH. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days within which to revise and extend
their remarks on the bill, H.R. 4040.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Florida?
There was no objection.
Mr. SCARBOROUGH. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, the Long-Term Care Security Act that we are considering
today is a consensus bill. It is reflective of the hard work and
dedication of Members on both sides of the aisle.
I want to begin by thanking my distinguished ranking member, the
gentleman from Maryland (Mr. Cummings), for his continued hard work and
cooperation through this process. I also appreciate the leadership of
my predecessor as chairman of this subcommittee, the gentleman from
Florida (Mr. Mica). The gentleman from Florida (Mr. Mica) initiated the
subcommittee's examination of long-term care, introducing the first
long-term care bill during last Congress.
The gentlewoman from Maryland (Mrs. Morella) has also worked hard to
create a long-term care insurance program for Federal employees and
retirees. And I would also like to thank the chairman of the committee,
the gentleman from Indiana (Mr. Burton), and the ranking member, the
gentleman from California (Mr. Waxman), for their support and hard work
on this bill, and so many others, Mr. Speaker, including just everybody
on the subcommittee, who really have done so much to make this work.
As chairman of the subcommittee, long-term care insurance has been my
top priority. During this Congress the subcommittee held three hearings
on long-term care which demonstrated the importance of long-term care
insurance. Longer life spans are leading to a rise in the number of
Americans who are likely to need some form of long-term care, which
today can cost as much as $50,000 a year. By 2030, the American Council
of Life Insurers estimates that a year in a nursing home will cost as
much as $190,000. Mr. Speaker, few Federal employees would be able to
bear these costs without liquidating everything that they have worked
so long for.
Long-term care insurance will help Federal workers plan for this risk
while protecting themselves and their loved ones of the indignities of
the Medicaid spend-down process that so many have to go through right
now. Under the Long-Term Care Security Act, Federal employees, members
of the uniformed services, and both civilian and military retirees may
purchase long-term care insurance sponsored by their employer.
As one of the Nation's largest employers, the success of our program
will undoubtedly influence other employers across this land. Just as we
are following the lead of many private employers who offer this benefit
to their workforces today, I really believe that other companies are
likely to follow the government's lead and offer their own employees
this very important protection.
{time} 1200
This legislation will allow insurance carriers and the Office of
Personnel Management to design flexible benefit packages to satisfy the
widely varying needs of our diverse population. Employees, members of
the uniformed services, and retirees will also have the opportunity to
obtain long-term care insurance for their spouses, their children, and
other close relatives.
We expect competition between the carriers in the bidding process to
keep premiums affordable for the entire Federal community. And that is
important.
Coupled with less stringent underwriting requirements for those who
enroll at their first opportunity, reasonable premiums should encourage
many employees to purchase long-term care insurance.
Ultimately, the success of our collective efforts will be measured by
the number of employees who buy insurance under this program. That is
why this bill provides for close Congressional scrutiny as the program
develops. Congress will receive periodic reports from the General
Accounting Office and the Office of Personnel Management. The
subcommittee will carefully monitor the implementation of this program
to ensure that it offers high quality coverage at very competitive
premiums.
Mr. Speaker, I encourage all Members to support this very, very
important bill.
Mr. Speaker, I reserve the balance of my time.
Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I commend the gentleman from Florida (Chairman
Scarborough) and the gentleman from California (Mr. Waxman), the
gentleman from Maine (Mr. Allen), the gentleman from Florida (Mr. Mica)
and the gentlewoman from Maryland (Mrs. Morella) for working diligently
to bring this bipartisan bill to fruition.
And another one of our Members, the gentlewoman from the District of
Columbia (Ms. Norton), has worked so hard on this legislation.
Mr. Speaker, I yield 3\1/2\ minutes to the distinguished gentlewoman
from Washington, D.C. (Ms. Norton).
Ms. NORTON. Mr. Speaker, I thank the gentleman for his kindness in
yielding to me. I have an appointment off campus, and I appreciate his
interrupting his opening remarks to yield to me.
Mr. Speaker, I want to thank the gentleman from Florida (Chairman
Scarborough) and the gentleman from Maryland (Mr. Cummings), the
ranking member, because we have been working on this bill for 3 years,
but this chairman and ranking member have brought this to fruition.
There will be millions of Americans not only who work for the Federal
workforce, but who see this leadership by example who will benefit by
their leadership here.
I want to thank the gentleman from Indiana (Chairman Burton) and the
gentleman from California (Mr. Waxman) for coming together. This is a
true bipartisan effort because the administration has been struggling
for this, as well. What happened was that the three parties got
together, the administration, the majority and minority, and we have an
important break-through bill here.
[[Page H2671]]
Mr. Speaker, there has been lots of concern on both sides of the
aisle about prescription drugs. And while there might be, long-term
care is the real sleeper. It is the nuclear bomb of health care because
of the baby boom generation and what they are going to bring to the
health care system.
To be sure, 40 million Americans are without health care at all. And
if that many do not have basic health care, imagine where the average
American stands on long-term health care. People are living longer. The
need for long-term health care is as plain as the nose on our faces.
This bill is, therefore, major for its implications for the entire
country.
In providing no Federal contribution, this bill breaks with
precedent. And I do regret that, because the Federal workforce has
indeed always made some contribution. But given the cost and what it
would mean to get that contribution and the importance of this bill, I
believe we have done the right thing in coming forward, particularly
since the group coverage means that employees will get a 15- to 20-
percent discount and, therefore, will be able very often to afford this
health care.
Mr. Speaker, we have a huge workforce. What this bill does is to use
the size of that workforce to advantage in the marketplace to bring
long-term health care to the largest workforce in the United States.
The effect on the largest population in the United States, the baby
boomers, is going to be especially dramatic because their health care
presents the greatest challenge to us all.
What this bill does, very simply, is to prevent the spend-down of
resources so that people then go on Medicaid. That is what happens now
to middle-class Americans, they spend down everything they have; and
then we end up picking up the cost.
That is not what the average American wants to do. Affordable access
to long-term health care will keep that from happening.
Mr. Speaker, finally, I point to a series in The Washington Post this
week. Every Member should read that series, because what it talks about
is the depletion of the workforce with no replacements of any numbers
coming in.
The glamor of the private sector today, it used to be the public
sector that was glamorous, but it is the private sector now, not to
mention the high-tech sector, means that they are going everywhere, but
the Federal sector, this is the kind of benefit that can help us draw
badly needed workers to the Federal workforce.
I am particularly grateful to the chairman and the ranking member for
their work together that brought this moment to the House.
Mr. SCARBOROUGH. Mr. Speaker, I yield myself such time as I may
consume to thank the gentlewoman for her kind remarks. The hard work,
really, that she and her staff contributed to this process made a huge
difference.
Mr. Speaker, I yield 4 minutes to the gentlewoman from Maryland (Mrs.
Morella) who, as I said previously, had a huge impact on this debate,
along with the gentleman from Florida (Mr. Mica) and others that have
been fighting for it for some time.
Mrs. MORELLA. Mr. Speaker, I certainly thank the gentleman for
yielding me the time.
Mr. Speaker, I must say I am thrilled that this bill is on the floor
of the House of Representatives. I think it is a very important issue.
I join my colleagues in supporting this legislation to provide group
long-term care insurance for Federal employees and annuitants, active
and retired military personnel, and their families. That means a policy
of, like, 20 million people.
It is critical that we pass this legislation. It takes an important
step in helping our Nation's families cope with the enormous financial
burden of long-term care. This bill, in its inception, has had long-
term care because we have been working on it for some time, and it was
for more than a year and a half that I led Congressional efforts to
make long-term care group insurance more accessible and more
affordable.
The legislation we are considering today, I am pleased to say, is
really pretty much a template of the bill I introduced, H.R. 1111, the
Federal Civilian and Uniformed Services Long-Term Care Insurance Act of
1999.
I do want to thank the 152 bipartisan cosponsors of that bill that
was introduced on March 16, 1999, and ask that they support H.R. 4040.
I also want to extend my gratitude and thanks to the many
organizations who played an essential role in devising the framework
for this legislation.
First of all, Dan Adcock of the National Association of Retired
Federal Employees was instrumental in guiding us every step of the way,
as was Allen Lopatin, Frank Rohrbough of the Retired Officers
Association, Cynthia Brock-Smith, Frank Titus, and Abby Block at the
Office of Personnel Management also contributed; and the Alzheimer's
Association, the Committee to Preserve Social Security and Medicare,
the American Health Care Association, and the National Association of
Uniformed Services. They all helped in developing this legislation
before us.
Until recently, my legislation was the only bill in the House that
would make long-term care insurance available at group rates to active
and retired Federal and military personnel, foreign service officers
and their families at no cost to the Government.
Indeed, now more than ever, Americans must take a long hard look at
the way we finance the future health care needs of the Nation's
seniors. The average senior turning 65 today can expect to live nearly
20 more years, maybe even more; and nearly one-fourth of them will
require nursing facility care at some point.
Simply put, longer lives increase the likelihood of long-term care.
This bill provides consumer protections. It also offers a series of
choices. So it is good legislation.
When the need for long-term care occurs, the financial and emotional
impact can be devastating. Promoting this coverage will help to ease
the pressure on Federal entitlement spending while protecting the
assets of our Federal families. I also see this as a national model
that the private sector may tend to look at and emulate.
So I urge my colleagues to support this very important legislation.
I also want to thank the staff who have been involved in putting this
legislation together.
Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, we are here today to debate consensus legislation that
would provide long-term care insurance as a benefit package for Federal
employees.
I do pause again to thank the gentleman from Indiana (Mr. Burton),
the chairman of our committee, and the gentleman from California (Mr.
Waxman), our ranking member, and certainly the gentleman from Florida
(Mr. Scarborough), the chairman of the subcommittee, and all the
members of our committee for making this happen.
During the 105th Congress, several bills were introduced in the House
and Senate that would establish a long-term care insurance benefit for
Federal employees.
A little over a year ago on, January 6, 1999, I introduced H.R. 110,
the Federal Employees Group Long-term Care Insurance Act of 1999. H.R.
110 is the Federal employee portion of the administration's four-
pronged initiative to help families who need long-term care insurance.
It provided a framework for implementing a long-term care program. It
authorized the Office of Personnel Management to purchase group
insurance policies from qualified private sector contractors, thereby
making long-term care insurance more available to Federal employees,
Federal retirees, and family families at more affordable group rates.
The gentlewoman from Maryland (Mrs. Morella) introduced long-term
care legislation which provided a framework similar to that proposed in
H.R. 110, but extended coverage to active military personnel retirees
and their families.
The gentleman from Florida (Chairman Scarborough) introduced H.R.
602, which was previously introduced by the gentleman from Florida (Mr.
Mica), the former chairman in the 105th Congress.
Though H.R. 602 provided a framework which allowed numerous insurance
companies to sell long-term insurance policies to Federal employees, it
further extended coverage to children, including adopted children,
stepchildren, and stepparents.
To his credit, the gentleman from Florida (Chairman Scarborough)
introduced a true bipartisan consensus
[[Page H2672]]
long-term care bill that reflects the hard work of this subcommittee
over the past year and a half on this issue.
Hours of research and collaboration with the administration, the
insurance industry, and employee organizations have resulted in the
introduction of H.R. 4040, the Long-Term Care Security Act.
H.R. 4040 includes elements of all of the previously mentioned bills
and adds a provision for spousal parity negotiated by ranking minority
member, the gentleman from California (Mr. Waxman).
I am pleased that the framework proposed in H.R. 110, allowing OPM to
contract with a single carrier or consortia to provide long-term care
insurance to Federal employees and permitting OPM to negotiate premiums
and benefits on behalf of Federal employees, is adopted in H.R. 4040.
This employer group model will allow Federal employees to realize
from 15- to 20-percent in premium savings. And I emphasize that, 15 to
20 percent.
Due to the gentlewoman from Maryland (Mrs. Morella), coverage has
been extended to the uniformed services in the bill. Blended families
can thank the gentleman from Florida (Chairman Scarborough) for having
the foresight to extend coverage to adopted children, stepchildren and
stepparents.
To ensure the financial solvency of the marital unit, the gentleman
from California (Mr. Waxman), the ranking member, negotiated a
provision in the act that would provide the spouses of Federal
employees with the same, if not very similar, underwriting standards as
at-work Federal employees.
The enhanced underwriting for spouses would protect the assets of the
couple by making it easier for spouses to qualify for participation in
the program.
During the Subcommittee on Civil Service markup, the gentleman from
California (Mr. Waxman) offered an amendment that further improved the
bill by including a section that provides that OPM furnish employees
information on the average cost of nursing home care to the percentage
of individuals who failed to maintain their coverage, the need for
inflation protection and a summary of how long-term care premiums can
be raised.
I was pleased to support his amendment, which was unanimously agreed
to.
Private long-term care insurance provides one of the few available
mechanisms for individuals to protect themselves against the
catastrophic costs of long-term care. In addition, it provides
alternatives to the type of care we receive when we need assistance
with our personal care and other activities of daily living.
{time} 1215
Whether enrollees choose the type of care that will allow them to
``age in place,'' which will allow them to stay at home with their
loved ones, community-based care, or nursing home care, they will be
protected when they need it the most.
I am pleased to be a part of this effort to bring long-term care
insurance to Federal employees. Again I commend all the Members for
their contribution to this bipartisan effort. In the end, civil
servants who work diligently for the citizenry of this great country
will benefit. As we take this action today, I am reminded of the
discussion that took place in a hearing in Jacksonville, Florida, when
we saw numerous people come forward and talk about the problems that
they were experiencing not only taking care of their children but
taking care of their parents. I know that their hearts must be glad
today.
At the minimum, the implementation of a long-term care benefit
program by the Federal Government will challenge Federal employees to
think about how they are going to finance and live out their elder
years, something we should all be thinking about.
Mr. Speaker, I reserve the balance of my time.
Mr. SCARBOROUGH. Mr. Speaker, I yield myself such time as I may
consume. I thank the gentleman from Maryland again for his hard work at
our field hearings up in Baltimore, for his hard work in Jacksonville,
and for the kind words that both he and the gentlewoman from the
District of Columbia (Ms. Norton) have said today. He is right, this is
a consensus bill. We have brought the best of all bills together. I
thank him. We could not have done it without him.
Mr. Speaker, I yield 3 minutes to the gentleman from Connecticut (Mr.
Shays).
Mr. SHAYS. Mr. Speaker, as a proponent and author of legislation
designed to encourage the purchase of private long-term care insurance
in general, I commend the Subcommittee on Civil Service chairman, the
gentleman from Florida, for his hard work on this issue and also the
gentleman from Maryland, the ranking member. I would also like to
recognize the third part of that triumvirate, the gentlewoman from
Maryland (Mrs. Morella), for her longstanding commitment to providing
access to private long-term care for Federal employees.
The Federal Employees Health Benefits Plan has long been held up as a
model of health care delivery. It is really the best in the country. By
providing all Federal employees access to private long-term care
insurance, we are taking an important step toward recognizing the
financial risks posed by long-term care and the need to plan for it.
The Long Term Care Security Act that we are debating today, sets an
example and encourages non-governmental employers to offer similar
benefit options to their employees.
Medicare does not pay for long-term care and seniors are forced, as
we all know, to spend down their assets to qualify for Medicaid, which
provides $33 billion in long-term care services each year for those who
have few resources. This has serious financial repercussions for
retirees and taxpayers who ultimately pay for long-term care assistance
through public programs. As the baby boom generation retires, the
purchase of private long-term care insurance is crucial to ease the
financial strain on public resources.
Mr. Speaker, I strongly support the Long Term Care Security Act, and
thank all of those who were involved in bringing this important
legislation to the floor. I would naturally urge all my colleagues on
both sides of the aisle to support it.
Again I thank the gentleman from Florida (Mr. Scarborough), the
gentlewoman from Maryland (Mrs. Morella) and the gentleman from
Maryland (Mr. Cummings).
Mr. CUMMINGS. Mr. Speaker, it is my privilege to yield 4 minutes to
the gentleman from California (Mr. Waxman), the ranking member of the
Committee on Government Reform and one who has really played a very
instrumental role in bringing us to where we are today. In introducing
him, I also thank him for all that he has done to put this on the front
burner and to bring us to where we are today.
Mr. WAXMAN. I thank the gentleman very much for yielding time to me.
I also am grateful for the kind words that he has said about me.
Mr. Speaker, I rise in support of H.R. 4040, the Long Term Care
Security Act, and I want to commend the gentleman from Florida (Mr.
Scarborough) and the gentleman from Maryland (Mr. Cummings) for their
work in producing a truly bipartisan bill.
The need for long-term care affects us all. Those who need long-term
care are our parents, our spouses, and inevitably ourselves. Many
Americans have already dealt personally with a loved one in need of
home or nursing home care. Many Americans have had the experience of
trying to find services and to arrange for payment. Most people know
that such care is hard to get and even harder to pay for.
I support offering long-term care insurance as a benefit option to
Federal employees. However, I also know that this is a product that can
be misunderstood. When the Federal Government offers this option, it
has a responsibility to ensure that Federal employees have the
information necessary to make an informed choice.
Mr. Speaker, I am especially pleased that a number of issues I raised
were addressed in this legislation. I want to commend the gentleman
from Florida for his willingness to work with us to ensure that these
issues were addressed.
The first issue of concern to me was that of spousal parity. I
believe that spouses should be treated like Federal employees. The
purpose of long-term care insurance is to protect the assets
[[Page H2673]]
of the insured when they are incapacitated. If one spouse has long-term
care insurance and the other does not, the couple's financial assets as
a family unit are at risk. For this reason, I am pleased that this bill
includes a provision on spousal parity.
Second, I believe that long-term care insurance should be available
to everyone who needs it. Underwriting standards for employees and
their spouses should be as minimal as possible. If we weed out through
underwriting everyone who is likely to need long-term care, we will
have failed to help those who most need help. For this reason, it was
important to me to learn from OPM that their goal is to offer insurance
on a modified guaranteed issue basis which would allow any Federal
employee who is not immediately eligible for benefits to purchase long-
term care insurance. Their goal is also to apply these same standards
to spouses if possible.
My final concern, which was addressed in an amendment that I offered
and was approved during the subcommittee markup, was to ensure that
Federal employees are fully informed about the advantages and
disadvantages of long-term care insurance.
Long-term care insurance is a complicated product. For some it is a
good way to save for the future but for others it can have serious
drawbacks. Furthermore, the benefits of policies vary considerably in
terms of duration of coverage, per diem allowances and other features
such as inflation protection. Without adequate inflation protection, a
long-term care policyholder may find that the benefits have simply
eroded.
Consumers do need to be aware of the consequences of dropping their
policies. Many consumer protections are options, not part of a basic
package. I am pleased this legislation requires that OPM provide
employees with information on all these important aspects so they can
make an informed decision.
Long-term care insurance is a relatively new product and it has a
limited track record. If the Federal Government begins offering long-
term care insurance, I believe it has a special responsibility to set
high standards for informing consumers.
Again I want to compliment the chairman of the Subcommittee on Civil
Service of the Committee on Government Reform and the subcommittee's
ranking minority member, the gentleman from Maryland, for their
leadership on this issue. I urge my colleagues to support the bill.
Mr. SCARBOROUGH. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from New York (Mr. Gilman).
Mr. GILMAN. Mr. Speaker, I am pleased today to rise in strong support
of H.R. 4040, the Long-Term Care Security Act, introduced by the
gentleman from Florida (Mr. Scarborough). I would like to thank the
gentleman from Florida for his attention to this important issue as
well as recognizing another committee colleague the gentlewoman from
Maryland (Mrs. Morella) for her extensive efforts in developing similar
legislation on this subject and the assistance of the gentleman from
Maryland (Mr. Cummings) in bringing this measure to the floor at this
time.
Finding quality long-term care options is fast becoming a major issue
of concern for our Nation's seniors. Revolutionary advances in medicine
over the past decade have helped to greatly expand our senior
population as well as offering those individuals improvements in their
quality of life. These trends will continue over the next 25 years as
the baby boomer generation enters their retirement days and our medical
community continues to develop new products to offset or eliminate
problems common to our elderly population.
This legislation takes an important first step in addressing this
growing challenge that faces our aging population. By giving Federal
employees the opportunity to purchase a long-term care insurance
policy, this bill encourages those employees to make plans for their
future medical needs while they are still young and can take advantage
of lower premiums. Such policies will protect employees from the
catastrophically high costs associated with long-term care provision
which could become necessary due to accident or illness at any time.
Accordingly, I urge our colleagues to give their full support to this
worthy piece of legislation.
Mr. CUMMINGS. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Maine (Mr. Allen), who is also a member of the
Subcommittee on Civil Service and one who has worked very hard on this
legislation and has constantly done everything that he can to uplift
the lives of our Federal employees.
Mr. ALLEN. I thank the gentleman for yielding me this time.
Mr. Speaker, I rise in strong support of H.R. 4040, the Long-Term
Care Security Act. The bill before us today is the product of
bipartisan cooperation. I applaud the efforts of the gentleman from
Florida (Mr. Scarborough) and the gentleman from Maryland (Mr.
Cummings) in bringing it to the floor today.
As the baby boom generation ages, the need for long-term care will
become acute. For example, the average cost of nursing home care is
expected to double in the next 30 years. We cannot expect Medicare or
Medicaid to absorb such costs and still pay reasonable benefits for
acute care needs. It is therefore essential that individuals begin to
plan for an almost certain increase in health care costs in their later
years.
To plan for their retirement needs, younger employees need
information about long-term care insurance and access to private sector
insurance plans through their employers. The private sector must be
involved in planning for employees' long-term care needs.
H.R. 4040 allows the Federal Government to act as a responsible
employer by offering its employees the opportunity to acquire group
long-term care insurance with no significant cost to the taxpayer.
Under the provisions in this bill, long-term care insurance will be
made available to all Federal workers, military service members and
retirees at group rates. Employees will pay the full cost of the
premium but have the advantage of a reduced rate. I hope that the
example set by the Federal Government will encourage all employers to
offer group long-term care insurance to their employees. This program
has the potential to create a national model for long-term care
insurance and for retirement planning.
I again want to thank the gentleman from Florida (Mr. Scarborough),
the gentleman from Maryland (Mr. Cummings), the gentlewoman from
Maryland (Mrs. Morella), the gentleman from Indiana (Mr. Burton) and
the gentleman from California (Mr. Waxman) for all their hard work in
bringing this legislation forward. H.R. 4040 is an example of the kind
of work this House can do when we act in a fair and bipartisan manner.
I thank them for their leadership and urge the swift passage of this
bill.
Mr. CUMMINGS. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Maryland (Mr. Hoyer). He has certainly been a mentor to
me, particularly with regard to the issues affecting Federal employees
and has consistently been at the forefront of the fight to make sure
that their rights and privileges are upheld and expanded.
Mr. HOYER. Mr. Speaker, I want to thank my friend the distinguished
ranking member from Baltimore for his remarks. I also want to thank him
for his outstanding service on this subcommittee. He brings a
perspective that is critical to the subcommittee and his leadership I
think will redound to the benefit of Federal employees for years to
come. I thank him for all his work and leadership.
I also want to thank the gentleman from Florida. The gentleman from
Florida brings, in my opinion, a new perspective to the chairmanship of
this subcommittee, a perspective that is a positive one and I too think
that that will also redound to the benefit of Federal employees. And so
I thank him for his leadership and service on this committee.
{time} 1230
Mr. Speaker, this measure before us would allow activity and retired
Federal employees, military personnel and their spouses to purchase
long-term care insurance as a group.
I do not see her here on the floor, but I wanted to make some
comments as well about my colleague, the gentlewoman from Maryland
(Mrs. Morella).
[[Page H2674]]
She has played a critical role in the formulation of this particular
piece of legislation that is important to Federal employees and she has
an appreciation for the long-term care costs and the challenges that
families face. I want to congratulate her for her efforts.
The advantages of pooling, Mr. Speaker, incorporated in this bill for
the Federal workforce is significant. The Office of Personnel
Management estimates that using the leverage of a risk pool this size
could drive down the costs of insurance as much as 15 percent to 20
percent. My colleagues often hear me say that it is incumbent on the
Federal Government to be a model employer, whether it be in pay,
benefits or diversity, I think that it is critical that the Federal
Government be a standard for other employers to emulate.
Mr. Speaker, hopefully, other employers will follow our lead in this
legislation and start providing this benefit because it makes such a
difference and is such an important area.
In the Washington metropolitan area, Mr. Speaker, the costs of long-
term care can exceed $50,000 per year, average at least $3,000 to
$3,500 a year, well beyond the means of almost every family; I do not
mean poor families, almost every family will find this cost too much
for them.
This bill gives families some measure of security, and I urge all of
my colleagues to support it.
Mr. Speaker, once again, I thank the gentleman from Florida (Mr.
Scarborough), the gentleman from Maryland (Mr. Cummings), the
gentlewoman from Maryland (Mrs. Morella), and others who have worked so
hard to bring this matter to the floor.
Mr. Speaker, I thank my distinguished friend for yielding me the
time.
Mr. SCARBOROUGH. Mr. Speaker, I thank the gentleman from Maryland for
his kind words and his hard work for Federal employees.
Mr. Speaker, I do not have any more speakers. I will defer to the
gentleman from Maryland (Mr. Cummings).
Mr. CUMMINGS. Mr. Speaker, may I inquire as to how much time we have?
The SPEAKER pro tempore (Mr. LaTourette). The gentleman from Maryland
(Mr. Cummings) has 1 minute.
Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I just wanted to take a moment to, again, emphasize that
sometimes I think we need to take a look at what we do and put it in
some historical perspective, and it is no question that what we are
doing here today will affect Federal employees and their families for
years to come and will affect generations actually yet unborn, because
it will allow those Federal employees who have parents where they are
now trying to help their parents and help their children to be able to
afford to help their parents and take good care of their children.
It does have some real long-term effect, but the fact is, as the
gentleman from Maryland (Mr. Hoyer), who said it best when he said that
it is truly a bipartisan effort, all of us coming together, addressing
the things that we have in common, and what we have in common is
lifting our people and making their lives better.
Mr. Speaker, again, I want to thank the gentleman from Florida (Mr.
Scarborough), thank all of the staff. I want to thank Ms. Tania Shand
on behalf of my staff who has worked very, very hard on bringing this
legislation to us today.
Mr. Speaker, with that, I urge all the Members of the House to
support this legislation.
Mr. Speaker, I yield back the balance of my time.
Mr. SCARBOROUGH. Mr. Speaker, how much time do I have?
The SPEAKER pro tempore. The gentleman from Florida has 7\1/2\
minutes remaining.
Mr. SCARBOROUGH. Mr. Speaker, I yield 2 minutes to the gentleman from
Maine (Mr. Baldacci), as long as he is not the only Member to come to
the floor in opposition of this wonderful bill.
Mr. BALDACCI. Mr. Speaker, I thank the gentleman from Florida (Mr.
Scarborough) for yielding me the 2 minutes.
Mr. Speaker, I want to compliment the gentleman for his hard work and
that of the subcommittee and the ranking member, the gentleman from
Maryland (Mr. Cummings), because this legislation is very important to
retirees, but I also think it is very important to everybody else,
because the plan with this was to get this going among retirees,
Federal retirees, but also to be able to demonstrate and educate and
offer information to the general public at large so that we could begin
to expand this program.
Mr. Speaker, we look at this as a beginning, a good beginning, and I
compliment the gentleman from Florida (Mr. Scarborough) and his staff
and the minority Members and the ranking member, the gentleman from
Maryland (Mr. Cummings) and his staff for doing a terrific job in
working on this.
Mr. Speaker, I appreciate being able to work on it with the gentleman
and to be able to bring this piece of legislation, which I encourage
all Members to support.
I strongly support the hard work and legislative effort of the
chairman of the subcommittee, the gentleman from Florida (Mr.
Scarborough).
Mr. SCARBOROUGH. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I want to thank the gentleman from Maine (Mr. Baldacci)
for his kind words. And, again, I thank the gentleman from Maryland
(Mr. Cummings) and all of those that have worked together to make
passage of this bill possible.
Mr. Speaker, under our current health care system, access to long-
term care services in the home and communities is influenced not just
by one's health status, but by their location, economic situation and
the availability of family support.
A recent study of American Council of Life Insurers highlighted the
need for private long-term care insurance. The study found that baby
boomers' chances of ending their lives in a nursing home are far higher
than most imagined, and the costs are projected to quadruple by the
year 2030.
Mr. Speaker, for middle-income families, the likelihood of receiving
government funded care at home or in an assisted living facility is
likely to remain small.
Federal employees who plan ahead for their long-term care needs can
potentially postpone or avoid institutionalization. If a substantial
number of baby boomers purchase long-term care insurance now, consumer
out-of-pocket costs for services such as home health care and adult
daycare can be cut in half by 2030.
Encouraging Federal employees and others to buy private long-term
care insurance is also a winner for taxpayers. Adequate insurance will
allow more Americans likely to be able to live at home during their
last years as most would prefer to do.
With private insurance strengthening family support systems, savings
in Medicaid nursing home expenditures could reach up to 30 percent.
Since introducing my original bill, I have conducted a continuing
dialogue with the minority, the industry organizations representing
civilian and military retirees and military families and the
administration.
I am very pleased that all of our efforts have resulted in this
consensus product.
I am also pleased, Mr. Speaker, that this bill will supplement other
steps this House has taken to bring peace of mind to many Americans by
making their long-term care insurance more affordable.
Already this House has passed legislation to provide an above-the-
line deduction for long-term care premiums and to allow employers to
offer long-term care insurance through cafeteria plans. Today's bill is
one more step in our overall effort to provide Americans with peace of
mind about their future needs, and I urge all members to lend their
support.
Mr. WELDON of Florida. Mr. Speaker, as a cosponsor of H.R. 4040, I
rise in strong support of The Long-Term Care Security Act. This bill
directs the Office of Personnel Management (OPM) to solicit competitive
bids from private insurers to provide long-term health care plans for
federal workers, including military and civilian employees and
retirees. This insurance may also be extended to include eligible
spouses, children, adopted children, stepchildren, and stepparents.
Employees who enroll in the group coverage must pay 100 percent of
the premium and may choose to have the premium deducted from their pay,
which is paid directly to
[[Page H2675]]
the insurance carrier. It is estimated, however, that these employees,
by getting a group rate, may realize a savings of between 15 and 20
percent on insurance premiums.
It is important that we encourage Americans to prepare for their
long-term health care needs. Too often Americans are unprepared for
this need and the failure to have such coverage often forces families
to deplete their resources. It is important that we pass this bill for
the benefit of our federal employees and members of our armed services
and retirees. This will help them in their efforts to provide for their
families and their retirement security.
In addition to the passage of this bill, I will continue to work to
ensure that the costs of long-term care insurance are deductible from
taxes. I am disappointed that we have not been able to get this tax
relief signed into law, and I am hopeful that we can move this forward
this year. This will benefit all Americans in preparing for needs that
they may have in the future.
I urge all of my colleagues to join me in passing H.R. 4040 and to
commit to work to make these premiums tax deductible.
Mr. STARK. Mr. Speaker, insurance coverage for long-term care
services is a gaping hole in our nation's healthcare safety net. H.R.
4040, the Long-term Care Security Act, will establish a long-term care
insurance program for federal employees. It is a small step in the
right direction. But, this bill is more notable for unmasking the
shortcomings of private long-term care insurance than for meeting the
long-term care needs of the American people.
Americans deserve long-term care insurance that satisfies three
criteria: reasonable cost, broad access and high quality. The main
lesson of this bill is that the only way to achieve reasonable cost is
to sacrifice both access and quality. We are in the dark about the
actual provisions of the long-term care insurance plan that will
ultimately be offered to federal employees. But the Office of Personnel
Management's primary objective is clear to negotiate a competitive
price. OPM has been upfront in telling us that limitations on access
and quality of these policies will be necessary to negotiate this
price.
Will FEHBP's long-term care insurance program be available to all
federal employees and their families? The answer is ``no''. One form of
underwriting known as ``short-form'', will exclude active employees who
are most likely to require long-term care services in the near future.
More extensive ``long-term'' underwriting, which requires a more
detailed medical history, will exclude larger numbers of retired
employees and their family members.
Will FEHBP's long-term insurance program guarantee basic consumer
protections such as inflation protection, and provisions that guarantee
that policies are still good in the event of carrier buyout or
bankruptcy? Again, the answer is ``no''. Inflation protection under
H.R. 4040 will only be available as an option. Yet, without inflation
protection, the average 60 year old purchaser will be shopping for
long-term care services in 2020 with year 2000 dollars! In other words,
by design, many of the policies will not meet purchasers' needs when
they become eligible for benefits.
The bottom line is that high quality private long-term care insurance
policies with universal access result in an excessively high price tag,
while affordable long-term care insurance policies may be inferior in
quality and not accessible to all. The real lesson of H.R. 4040 is that
even the formidable purchasing power of the federal employees is not
enough to turn private long-term care insurance into the answer to the
long-term care problem.
I will vote for H.R. 4040 today because it does inch us forward on
long-term care products. However, private long-term care insurance
falls far short in delivering comprehensive and high quality long-term
care services to all who need it.
The only way we will actually assure long-term care protections for
people is through a national social insurance program like Medicare.
That's where the debate needs to move next.
Mr. DAVIS of Virginia. Mr. Speaker, I rise today to offer my strong
support for H.R. 4040, the Long-Term Care Security Act. For the first
time, the federal government will make a concerted effort to provide
the men and women who have dedicated their lives to the service of this
country, with long-term health care.
Under this bill, the Office of Personnel Management will simply
fulfill the role of a Human Resources department and solicit
competitive bids from private insurers to provide the most equitable
and comprehensive long-term health care to federal employees. That
commitment by OPM represents the extent of the Government's active
participation in this process. Once the contract is awarded and the
program is established, all federal employees who chose to participate
will be responsible for paying 100% of the insurance premiums.
I think it is important to note that this bill has some minor
administrative costs associated with it, I believe roughly $21 million
over two years, that are necessary implementation costs. After that
initial two year period, the benefits of H.R. 4040, which will be
available to both current Uniformed Services and civilian employees, as
well as military and civilian retirees, will actually start showing a
profit. That makes this bill a win-win both in terms of cost and in
services provided.
I would like to commend my good friend from Florida, the Chairman of
the Civil Service Subcommittee, Mr. Scarborough, for managing this bill
on the floor today. I would also like to take a moment to thank the
gentlelady from Maryland, Mrs. Morella. Her dedication to protecting
and promoting issues important to federal employees is well known.
Specifically, Mrs. Morella has long championed the cause of providing
all federal employees and retirees with the most comprehensive and
affordable health care available, and without her work on this issue,
H.R. 4040 would not be on the Floor today.
Mr. BURTON of Indiana. Mr. Speaker, I rise in support of H.R. 4040,
the ``Long Term Care Security Act.'' The Government Reform Committee,
in particular the Civil Service Subcommittee chaired by Congressman Joe
Scarborough worked in a bipartisan manner to bring forward this
legislation. The bill will allow all federal employees, retirees,
active duty and retired members of the Uniformed Services, as well as
their qualified relatives to purchase long term care insurance. By
offering the program through the federal government, we can provide
long term care options at affordable rates.
The Civil Service Subcommittee held several hearings on long term
care. We found that as Americans have begun to live much longer, the
number of individuals needing long term care is on the rise. As the
baby boomers are reaching retirement age, we will only see our elderly
population increase. As a result, the need for long term care will
continue to grow.
The cost of long term care, whether in a professional facility or at
home presently exceeds $45,000 a year. What many people do not realize
is that their health plans, disability insurance, or even Medicare will
not cover these costs. Unfortunately, many find out that they are not
covered when it is too late--when a family member suddenly needs that
care. Our Committee has heard from people who have depleted their
entire life savings caring for a loved one. A family's assets are
sometimes just not enough. Without the proper insurance, the vast
majority of families is unprepared for the burden of long term care.
Through our hearings, we found that for many, the best way to maintain
retirement security is to purchase long term care insurance.
I am pleased that our Committee was able to work together in a
bipartisan manner to bring that security to our federal workforce and
Uniformed Services. Mr. Scarborough, along with Mrs. Morella and Mr.
Cummings, worked very hard to ensure that the long term care bill took
into account everyone's concerns. We wanted to ensure that there would
be open competition in the contracting process in order to achieve the
best rates. H.R. 4040 is a strong consensus bill which the Committee
believed would provide the framework for a strong long term care plan.
Under the legislation, the Office of Personnel Management would be able
to negotiate with the insurers for the best plans with the most options
while keeping premiums affordable for all federal employees.
Mr. SCARBOROUGH. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Florida (Mr. Scarborough) that the House suspend the
rules and pass the bill, H.R. 4040, as amended.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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