Toomey Re-Introduces Measure to Make Long-Term Care Insurance More Affordable

Washington, DC – US Senator Pat Toomey (R-Pa.) Reintroduces a bill to make long-term care insurance more affordable. Senator Toomey’s Long-Term Care Affordability Act would allow individuals to live with their 401st Paying up to $ 2,500 for long-term care insurance each year(k), 403(b), and IRAs with no tax penalty.

“The outbreak of a chronic illness that too often requires nursing home or home care has the potential to devastate older Americans financially,” Senator Toomey said. “This legislation allows Americans to use existing retirement accounts to pay for long-term insurance – a change in common sense to increase financial security in retirement. I hope that my colleagues will support this measure together with me. ”

Retirement accounts offer a tax benefit to workers who are now putting money aside for retirement. Advance withdrawals from these accounts are generally treated as income and taxed accordingly. There are exceptions, however. For example 401(k)

Owners may be able to use their retirement account for life insurance with no tax penalty. Senator Toomey’s move would treat long-term care insurance in a similar way.

According to the US Census Bureau, 50 percent of people over the age of 65 require some long-term care, and more than half of American households contribute to retirement savings. All of them would be entitled to pay for long-term care with retirement assets under this law.

The organizations that have approved this law include:

·
Alzheimer’s Association

·
Alzheimer’s Impact Movement

·
America’s Health Insurance Plans (AHIP)

·
American senior housing association

·
Argentum

·
Edward Jones

·
Long-term care insurance partner

·
National Association of Health Insurance Companies (NAHU)

·
National Association of Insurance and Financial Advisors (NAIFA)

·
National Association of Insurance Commissioners

“Alzheimer’s is a devastating and deadly disease that affects millions of Americans,” said Robert Egge, chief public policy officer for the Alzheimer’s Association and executive director of the Alzheimer’s Impact Movement (AIM). “One of the most costly diseases in the country, for too many American families bearing the cost of caring for a loved one, is a challenge. We thank Senator Toomey for his guidance in reintroducing the Long Term Care Affordability Act. This bill could have a significant impact on families struggling to pay for care by making care insurance more accessible by allowing pension funds to be used to purchase insurance. “

“Argentum is excited to support the Long Term Care Affordability Act to help more Americans plan and meet their long-term care needs,” said James Balda, President and CEO of Argentum. “Unfortunately, one in three Americans has saved less than $ 5,000 for retirement and less than 8% have long-term care insurance. By the end of this decade, each of the 74 million baby boomers will be 65 years old and have a roughly 50% chance of becoming dependent on care at some point in life. As the need for long-term care grows, this legislation provides an extremely important means of ensuring that more Americans have the financial means to meet their care needs. ”

“The need for long-term care insurance is an important issue for aging Americans and their families,” said Janet Trautwein, NAHU CEO. “As this population continues to grow, insurers, policymakers and consumers will need to think seriously about how to plan and manage the costs associated with long-term care needs. NAHU fully supports Senator Pat Toomey’s efforts to make long-term care insurance more accessible and affordable. “

You can read a one-pager on legislation here, and the text of the invoice is available Here.

Background:

In November 2019, Senator Toomey convened the Healthcare Subcommittee of the Senate Finance Committee to address barriers to diagnosis, treatment, and care for Alzheimer’s patients. During that hearing, Senator Toomey outlined the need for this new legislation. You can watch it here.

Following that hearing, Senator Toomey and Senator Debbie Stabenow, Chair and Senior Member of the Subcommittee, sought input by health care providers, researchers, patients, stakeholders, states, and others to update on how this legislation evolves.

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