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Solutions on improving Long Term Care Insurance

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If you are turning 65 today you have almost a 70% chance of needing some type of long-term care services. Prices for long term care services can range from $40,000-$250,000. Congress recently has been taking action towards lowering costs that can be more affordable for seniors.

Here are some of the policy solutions to help improve Long Term Care insurance from AHIP:

  • Let employees use cafeteria plans and flexible spending arrangements to buy LTC coverage. Allowing LTC coverage to be provided under a cafeteria plan would make it more affordable. This solution would have limited impact on the tax dollars received from employees, because most employees would simply shift their cafeteria plan/FSA dollars from other pre-tax benefits to LTC coverage.*
  • Allow retirement plans to invest directly in LTC coverage. This improvement will allow Americans to treat their LTC coverage like any other retirement plan investment. Critically, for the millions of baby boomers in or approaching retirement, the impact on tax revenue would be minimal, because they would be using existing retirement plan savings to protect themselves from potentially catastrophic LTC costs.*
  • Allow employees to make additional contributions to their Health Savings Accounts (HSA) to pay for LTC plans. This approach provides more flexibility and choice, allowing employees to save more pre-tax dollars to buy LTC coverage for themselves or their spouse. While this approach may result in some revenue losses in the short term*, encouraging people to invest now to cover future health care expenses will likely save more taxpayer dollars longterm.


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