Americans Support Tax Relief For Long-Term Care Insurance Premiums

Oct 12, 2000

FOR IMMEDIATE RELEASE

CONTACT: Richard Coorsh

October 12, 2000

(202) 824-1787

e-mail: rcoorsh@hiaa.org

WASHINGTON, D.C. – Roughly one out of three Americans above the age of 55 believe the single most important action government could take to help families meet their long-term care needs would be to offer tax relief for people who purchase private long-term care insurance, according to a new survey released today by the nation’s most prominent health insurance trade association.

The survey – released by the Health Insurance Association of America (HIAA) – also reveals that more than three in four people who decided not to buy private long-term care insurance would be more interested in doing so if they could deduct the premiums from federal income taxes.

"The costs for nursing home expenses, home health care, or other long-term care that many Americans will have to bear remain our nation’s largest unfunded liability," observed HIAA President Chip Kahn. "The president and Congress can help Americans protect themselves against these catastrophic costs – and to give them much better long-term care choices – by enacting legislation allowing consumers to take a 100 percent, above-the-line tax deduction for long-term care insurance premiums."

Other key findings of the new HIAA survey include:

• Most Americans do not believe that the government will pay for most long-term care services within the next 10 years. Survey respondents also believe that consumers will have to assume greater responsibility for their long-term care needs.
• People with long-term care coverage are getting more "bang for their buck." In 2000, 77 percent of long-term care insurance policies cover both nursing home and home health care, compared to 37 percent in 1990. Over the past five years, the average daily nursing home benefit has increased by 28 percent -- higher than the rate of inflation. Meanwhile, during the same time, average annual premiums have increased only 11 percent.
• People are buying long-term care insurance at a younger age. One-third of all individual long-term care policies sold are purchased by people between the ages of 55 and 64. Meanwhile, the median income of current buyers of individual long-term care insurance is $42,500.
• Substantially more buyers and non-buyers of long-term care insurance believe they have greater than a 50-50 chance of requiring nursing home care. In 2000, 65 percent of buyers, and 55 percent of non-buyers of long-term care insurance believe that they have a greater than 50-50 chance of needing nursing home care. This compares to 26 percent of buyers, and 25 percent of non-buyers in 1995.

HIAA’s survey of buyers and non-buyers of long-term care in the individual insurance market was conducted by LifePlans, Inc. of Waltham, MA. The survey compares sociodemographic characteristics of buyers and non-buyers with a sample of people age 55 and older in the general population. It also compares attitudes of buyers, non-buyers, and members of the general population toward long-term care financing and the risk of requiring long-term care.

The Health Insurance Association of America (HIAA) is the nation’s most prominent trade association representing the private health care system. Its nearly 300 members provide health, long-term care, dental, disability, and supplemental coverage to more than 123 million Americans. It is the nation's premier provider of self-study courses on health insurance and managed care.

###

PLEASE NOTE: "Buyers and Non-Buyers of Long-Term Care Insurance: A Decade of Experience" is available at http://www.hiaa.org/news/news-state/001012mediakit.htm.