LONG TERM CARE: Tax Credit To Be Introduced Today
After reaching a bipartisan compromise yesterday, lawmakers are expected to announce today a $3,000 annual tax credit for people responsible for the long term medical care of their parents, children or other dependents, the San Jose Mercury News reports. Similar to a measure President Clinton called for in his budget proposal last month, the provision would allow taxpayers to subtract $3,000 from what they owe in taxes, The bipartisan legislation also would make premium payments for long term care insurance policies tax deductible.
Not A Perfect Solution
Rep. Karen Thurman (D-Fla.), co-sponsor of the measure, said, "This legislation is intended to encourage Americans to prepare for the day when they may need long term care." The tax credit and premium deductibility do not address "the plight of low- income elderly people" living on Social Security who do not pay taxes, nor does the proposal alleviate "spend down," in which the elderly liquidate their assets to qualify for long term care under Medicaid. Martin Corry, director of federal relations for AARP, acknowledged the measure's drawbacks, saying, "No one is saying this solves all the problems," but added, "It's a step. It's at least an improvement over where we are today." The legislation has a good chance of being enacted this year and has been endorsed by both AARP and the Health Insurance Association of America -- two groups that often take opposite stances on health care issues (Kosczuk, 3/8).