New Initiative Addresses Long-term Care

By Mary R. Anderlik
Health Law & Policy Institute

After years of neglect, long-term care has finally attracted the attention of policy makers. On January 4, President Clinton announced a new initiative consisting of a long-term care tax credit, a family caregiver support program, a national campaign to educate Medicare beneficiaries concerning the lack of long-term care coverage under Medicare, and a directive to offer private long-term care insurance to federal employees. On January 21, Vice President Gore unveiled a related proposal affecting Medicaid.

Under the first proposal, people who are unable to perform three or more basic tasks of everyday life, as certified by a physician, would be entitled to a $1000 a year tax credit. Under certain circumstances, the tax credit would be available to family members providing care. Since the credit would not be linked to the site of care or to expenses incurred, there would be no incentive for institutionalization and no need for family caregivers to engage in extensive bookkeeping to support a claim to the credit. The price tag is estimated at $5.5 billion.

The second proposal, the family caregiver support program, would be funded through grants to the states totaling $625 million over five years. An estimated 250,000 families would benefit from services such as training, counseling, and respite and adult day care. Although the numbers are small, this proposal is significant, since under managed care the burden of caregiving is increasingly being shifted to family members. Providing care 24 hours-a-day, 7-days-a-week may speedily overtax family resources, studies have shown that such demands frequently have an adverse effect on the health of the primary caregiver. With the final two proposals, at a cost to the government of approximately $25 million over five years, President Clinton hopes to "encourage more people and more companies to invest in long-term care coverage." (The Health Insurance Portability and Accountability Act of 1996 included standards for long-term care insurance, but those provisions of the Act failed to generate much interest.)

The proposal announced by Vice President Gore would permit states to expand their Medicaid programs to cover community-based care, as well as nursing home care, for people with incomes up to 300 percent of the Social Security limits—without a special federal waiver. The cost to the federal government is estimated at $110 million over five years.

The Clinton Administration’s long-term care initiative puts government in the role of supporting households rather than meeting needs in more direct fashion. The basic premise that guides these proposals is simple: it is best for people to be cared for in the home by family members, if the technical demands of care are not too great. The rhetoric of family and community should appeal to conservatives who cherish family values and liberals who favor de-institutionalization. Critics have charged that the initiative is "too little, too late," and a cynical ploy heavy on symbolism and light on substance. Others have expressed general reservations about attempts to implement a social agenda through increasing the complexity of the tax code rather than through direct spending. Tax credits are a poor means for helping the poor, who generally do not pay income taxes. Approximately 40 percent of the elderly in the United States have incomes too low to pay any federal income tax.

Those interested in long-term care will need to monitor activity at the state as well as the federal level. A poll conducted by the National Conference of State Legislatures’ Health Policy Tracking Service found that long-term care is expected to be on the legislative agenda in 45 states. Of these, 32 are expected to consider legislation on assisted living and nursing facilities.