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PRESIDENT CLINTON ENACTS LEGISLATION TO PROVIDE LONG-TERM CARE
INSURANCE TO FEDERAL WORKERS
Urges the Congress to Act Now to Assist All Families with Long-Term
Care Needs
September 19, 2000
Today, President Clinton will sign into law the Long Term Care Security
Act, which authorizes the Office of Personnel Management (OPM) to
negotiate with private insurers to offer more affordable, high-quality,
long-term care insurance policies to Federal employees, retirees, and
their families. This initiative will provide a new insurance option
to 13 million Americans, and will serve as a model program for private
employers throughout the nation. The President will also urge the
Congress to take additional legislative steps this fall to provide assistance
to the millions of Americans of all ages who currently have
extraordinary unmet long-term care needs and who can not purchase
private long-term care policies at any price. Specifically, he will
call on the Congress to pass his $3,000 tax credit for the chronically
ill; to reauthorize and strengthen the Older Americans Act by adding a
new caregivers initiative; and to pass a long-overdue and voluntary
Medicare prescription drug benefit.
MILLIONS OF AMERICANS HAVE LONG-TERM CARE NEEDS
An increasing number of Americans have a range of long-term care
needs. Over five million Americans have significant limitations due to
illness or disability and thus require long-term care. Approximately,
two-thirds are older Americans. Also, millions of adults and a growing
number of children have long-term care needs because of health condition from
birth or a chronic illness developed later in life.
The aging of Americans will only increase the need for quality
long-term care options. The number of Americans age 65 years or older
will double by 2030 (from 34.3 to 70 million), so that one in five
Americans will be elderly. The number of people 85 years or older,
nearly half of whom need assistance with everyday activities, will
grow even faster -- from approximately 4 million to 9 million.
Families, who are the primary caregivers for people with long-term
care needs, pay a big price for this care. Although it is difficult to
quantify, one study found that the economic value of care giving for
families ranges from $4,800 to $10,400 per caregiver. As such, this
new $3,000 tax credit could cover up to 60 percent of families' costs.
In addition, not only are caregiving responsibilities expensive, they
can be physically demanding and psychologically exhausting.
ENACTING NEW LONG-TERM CARE INSURANCE OPTION FOR FEDERAL EMPLOYEES. The
legislation President Clinton will sign today, the Long Term Care
Security Act (HR 4040), provides the 13 million Federal employees,
retirees, and their families with a new option to purchase
non-subsidized, quality private long-term care insurance. The new
insurance options will cover a range of services at group rates,
including home health care, adult day care, and nursing home care.
This legislation allows OPM to use its purchasing power to negotiate
savings of 15 to 20 percent on commercial long-term care insurance
rates and to ensure that such products meet high quality standards.
It will establish the Federal government as a model employer and provide
private-sector companies with a model for offering quality long-term
care insurance. Because employers are only beginning to learn how to
provide these benefits to their workers, only about 4 million Americans
-- 1.5 percent of all Americans-- have private long-term care
insurance. OPM anticipates that approximately 300,000 Federal employees
will participate in this program.
CHALLENGING THE CONGRESS TO PASS INITIATIVES TO HELP AMERICANS WHO NEED
LONG-TERM CARE ASSISTANCE NOW. The Administration's long-term care
initiative, unveiled by President Clinton and Vice President Gore, First
Lady Hillary Rodham Clinton and Tipper Gore, includes:
Supporting people with long-term care needs and their families
through a $3,000 tax credit. This initiative acknowledges and supports
millions of Americans with long-term care needs or the family members
who care for and house their ill or disabled relatives through a phased
in $3,000 tax credit. This new tax credit supports the diverse needs of
families by compensating a wide range of formal or informal long-term
care for people of all ages with three or more limitations in activities
of daily living (ADLs) or a comparable cognitive impairment. It would
provide needed financial support to about 2 million Americans, including
1.2 million older Americans, over 500,000 non-elderly adults, and
approximately 250,000 children per year. This credit would be phased in
beginning with $1,000 in 2001 and rising in $500 increments, so eligible
people would receive $3,000 in 2005 and thereafter. The credit would be
phased out beginning at $110,000 for couples and $75,000 for unmarried
taxpayers. It costs about $8.8 billion over five years and $26.6 billion
over 10 years.
Reauthorizing and strengthening the Older Americans Act (OAA) to
assist family caregivers of seniors. For more than 35 years, the OAA
has helped millions of seniors lead more independent lives by enabling
communities to offer them vital, everyday basics like transportation
and meals-on-wheels. Today, President Clinton will urge the Congress
to reauthorize the OAA and strengthen it by funding our Family
Caregivers Program. This nationwide program would support families who
care for elderly relatives with chronic illnesses or disabilities by
enabling states to utilize a visible, reliable network to provide
quality respite care and other support services. This program, which
costs more than $1.25 billion over 10 years, would assist approximately
250,000 families nationwide. Recent studies have found that services
like respite care can relieve caregiver stress and delay nursing home
entry, and that support for families of Alzheimer's patients can delay
institutionalization for up to a year.
Passing a new, voluntary Medicare prescription drug benefit. Older
Americans who lack prescription drug coverage have been found to become
institutionalized at twice the rate of those seniors with prescription
drug coverage. In addition, this population requires and utilizes a
much greater proportion of medications to manage and treat chronic
conditions. For this reason, a meaningful, affordable, voluntary
Medicare prescription drug benefit is a critical component of an
effective long-term care strategy.
BUILDS ON THE NEW NURSING HOME INITIATIVE RECENTLY UNVEILED BY THE
CLINTON-GORE ADMINISTRATION. Today's announcement builds on President
Clinton's recent action to improve nursing home quality nationwide. The
initiative: (1) invests $1 billion over 5 years in a new grant program
to increase staffing levels nationwide and improve quality of nursing
home care; (2) imposes immediate penalties on nursing facilities placing
residents at risk and reinvests these funds in the new grant program;
(3) directs the Health Care Financing Administration to establish
national minimum staffing requirements and complete recommendations for
appropriate reimbursement within two years; (4) helps families make
informed decisions by providing accurate information on staffing levels;
and (5) launches a new campaign to identify and prevent unintended
weight loss and dehydration among nursing home residents.