Washington (July 4, 2003) -- A bipartisan effort is underway to help Americans pay for the high costs of long term care that can easily exceed retirement budgets.
Sen. Chuck Grassley, chairman of the Committee on Finance, R-Iowa and Sen. Bob Graham, D-Fla., have re-introduced their bipartisan legislation to help Americans pay for nursing home stays, assisted living, home health aides, and other services.
The bill, titled the Long-Term Care and Retirement Security Act of 2003 (S. 1335), gives individuals an above-the-line tax deduction for the cost of their long-term care insurance policy. This deduction would phase in, with a faster phase-in for those 55 years old and older.
The bill also allows individuals or their caregivers a $3,000 tax credit to help cover their long-term care expenses. This would apply to those who have been certified by a doctor as needing help with at least three activities of daily living, such as eating, bathing or dressing. This credit would help caregivers pay for medical supplies, nursing care and any other expenses incurred while caring for family members with disabilities.
Another provision allows employers to include the deduction provision for long-term care policies in "cafeteria plans" in which employees are able to choose from a variety of benefits for different types of care, and flexible spending accounts in which employees set aside pre-tax dollars to pay for long-term care insurance.
"An aging nation has no time to waste in preparing for long-term care," Grassley said. "The need to help people afford long-term care is more pressing than ever. I look forward to working with Senator Graham and our colleagues in the Senate to get our bill passed into law as soon as possible."
-- WebCPA staff
