Rep. Courtney Introduces the TLC Act of 2008, Tax Break for Long-term Care Premiums and Caregiver Tax Credit

Press Release

Rep. Courtney Introduces the TLC Act of 2008, Tax Break for Long-term Care Premiums and Caregiver Tax Credit

During a press conference call today with reporters, Congressman Joe Courtney introduced H.R. 6237, the Tax Relief for Long-term Care (TLC) Act of 2008, legislation that provides a tax break for individuals paying long-term care premiums and that offers a caregiver tax credit. Congressman Courtney was joined by Brian D. Ellsworth, President & CEO, Connecticut Association for Home Care and Hospice.

"Americans should be looking at long-term care insurance as part of their long-term financial planning, yet high costs are far too prohibitive for most working families," stated Courtney. "My legislation will provide families a tax break for real savings, and allows individuals to save for their future. I am pleased to introduce this legislation because it acknowledges the role that caregivers provide to their dependents and gives them a tax break for the uncompensated care they provide for their loved ones."

The demand for long term care services in Connecticut is rapidly growing. Of the current 393,560 Connecticut residents between ages 60-74, the demand for long term care services will increase by 53 percent by 2030.

"The Connecticut Association for Home Care & Hospice is pleased to support this legislation. It is good for patients and families because it encourages planning ahead. With appropriate planning, persons with long term care needs are able to preserve their assets and stay in the community longer, delaying or avoiding institutional placement," stated Ellsworth. "From the provider perspective, long term care insurance helps to fill a hole in coverage for the middle class with long term care needs. This reduces reliance on the Medicaid program, which underpays home health providers by 30 percent."

H.R. 6237, introduced on Wednesday, June 11, 2008, will provide taxpayers with long-term care needs a tax credit on long-term care insurance premiums. It creates an incentive for individuals to purchase long-term care insurance, a crucial part of financial retirement planning. The caregiver tax credit component is designed to lessen the financial costs associated with providing uncompensated, long-term care for a family member or dependent.

The tax credit will create an incentive for individuals to purchase long-term care insurance, a crucial part of financial retirement planning. Home Health Care and Long-Term Care are generally not covered by health insurance or Medicare. With nearly 71 million Americans over 65, the potential cost on an already strained Medicaid system could cause the system to bust. This legislation would reduce the burden on the Medicaid system, and give individuals more options to meet their needs.

Whether caring for a chronically ill child or aging parent, the financial burden associated with meeting the long-term needs of those individuals can be crushing for a middle-class family. This tax credit is designed to provide relief for family members who take on the incredible responsibility of caring for their loved ones with long-term care needs.

According to The American Council of Life Insurers (ACLI), only 10 percent of seniors currently have long-term care insurance policies and only 11.4 percent of all private industry employees are offered long-term care insurance as a voluntary benefit.

What the bill does:

- The legislation provides for a tax credit for long-term care insurance premiums.

- The legislation also provides for a caregiver tax credit for the long-term care needs of an applicable individual - one who has been established by a physician to have long-term care needs for 180 days.

- The tax credit will be $1,000 in 2009 and gradually increases to $3,000 for 2013 and thereafter.

- The tax credit is targeted towards middle class Americans with an adjusted gross income of $150,000 for a joint return and $75,000 for an individual filer. The credit is reduced by $100 for ever $1,000 over the income threshold.

- The tax credit may be multiplied to reflect multiple care recipients. Individuals can file for both tax credits.

Congressman Courtney's TLC Act has been endorsed by Connecticut Association for Home Care & Hospice, American Health Care Association (AHCA), and Connecticut Association of Health Care Facilities, Inc (CAHCF).

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