Bill Would Create New Federal Long-Term Care Insurance Program

Inside Health Policy/ By Maya Goldman
  
Rep. Thomas Suozzi (D-NY) introduced a bill earlier this month that would create a long-term care insurance model using a public-private partnership, and he hopes to get the bill included in the upcoming reconciliation package, according to a spokesperson. Unlike previous long-term care insurance legislation, the bill includes a way to finance the insurance and outlines plans for an education campaign.
 
Suozzi’s bill would establish a Federal Long-Term Care Trust Fund to pay for catastrophic long-term care for those needing many years of services. The bill seeks to amend the Social Security Act to provide long-term care insurance benefits to people who have reached retirement age and have a chronic illness for at least one year or until death, so long as they’ve applied for long-term care insurance benefits and have contributed to the Federal Long-Term Care Trust Fund for at least six quarters.
 
The trust fund would be made possible by worker and employer contributions of 0.3% of wages, paid through a social insurance tax. Self-employed people would be taxed at 0.6% of income.
 
The bill would direct Congress to appropriate $12 million in fiscal years 2022, 2023 and 2024 to initially set up the fund and pay out first benefits. The bill also requests Congress appropriate $50 million for public education related to long-term care. These initial appropriations would be paid back within 10 years after the first appropriations are made.
 
The full benefit paid out to consumers would be around $3,600 a month to start and would be adjusted for inflation, should the bill be enacted. Consumers would receive benefits in cash to use for paying home aides, nursing facility fees or other services.
 
There would be a waiting period between the onset of a disability and long-term care benefits setting in. Those with lower incomes, up to the 40th percentile, would be eligible for benefits after a one-year waiting period, while those with higher incomes would have longer waiting periods adjusted for their income percentile.
 
This waiting period should allow private long-term care insurance to become more affordable and comprehensive, said Joanne Lynn, a health and aging policy fellow who authored the bill with Suozzi’s office. Instead of needing to insure people for the duration of their time in long-term care, private companies could offer customizable plans that insure for just a few years, allowing prices to come down, she said.