LONG TERM CARE: Tax Break Bill Gaining Momentum
Legislation offering tax relief for long term care could pass this year, as favorable momentum continues to grow, CongressDaily/A.M. reports. One "big reason" is that the White House is "warming to the idea" of a tax deduction for those who purchase long term health coverage, as long as such a bill includes other White House proposals. A coalition of bipartisan lawmakers and the AARP and HIAA proposed "coupling a tax deduction for people who buy the insurance with Clinton's tax credit for long term caregivers." Administration health care adviser Chris Jennings said the White House would "never" let a tax deduction "stand alone," but "if it's included as part of a broader initiative that incorporates all of the president's other long term care initiatives, we would consider it as long as it doesn't undermine our efforts to protect and strengthen Medicare and Social Security."
The proposal -- introduced yesterday by Senate Special Aging Chair Charles Grassley (R-Iowa) and Sen. Bob Graham (D-Fla.) -- would cost a total of $9 billion over five years, with the tax deduction costing $1 billion over five years and the credit costing $8 billion over the same period. Jennings noted that support from the White House, Congress, AARP and HIAA "creates some desirable momentum for moving forward to address this issue." Chip Kahn, president of HIAA, agreed, speculating movement on long term care this year. He added, "We're making the argument that a part of the train is going through the station right now. If the administration gets the credit, they may be more flexible on the deduction" (Werber/Serafini/Fulton, 3/9).