• Permit employees to make additional contributions to their Health Savings Accounts (HSA) to pay for LTCI premiums.
• Support legislation or regulatory guidance to allow the payment of LTCI incidental benefits that enhance care options and provide access to benefits, including those intended to support healthy, independent living and aging in place, prior to satisfying the current eligibility requirements of a severe cognitive impairment or substantial assistance with the requisite activities of daily living. This allowance should not cause the policy to forfeit its tax qualified status;
• Revise current federal requirements surrounding inflation protection for LTCI policies to encourage policy design innovations that would meet the needs of consumers more effectively.
• Launch a national educational campaign to help consumers understand both the need for and benefits of LTC coverage.
“We believe these recommendations align with our mutual goals to expand consumer choice and access to quality LTCI coverage, reduce LTC costs faced by consumers, manage LTCI premiums, and improve health outcomes for LTCI policyholders in the most cost-efficient manner possible,” said Piacentini, who co-authored the recommendations with America’s Health Insurance Plans (AHIP), the national trade group for health insurers.
The Treasury task force is expected to meet to discuss LTCI reforms this fall. Investment advisors are watching developments closely.
“Obviously any tax incentive would be helpful insofar as they reduce the effective cost to the consumer,” said Chris Chen, an advisor with Insight Financial Strategists LLC, Waltham, Mass.
Chen said that expanding the LTCI deductions that business owners already get to employees would definitely be helpful to planning.
Creating Medicare supplemental LTCI policies or riders would also incent more Americans to purchase coverage, the veteran advisor said.
“Another possibility not often discussed is adding a Medicare LTC option,” Chen said. “Currently, if you run out of money, Medicaid will pick up the costs of LTC. Having a Medicare option—Part LTC if you will—to help accumulate funds for LTC, at least on a partial basis, could motivate people to think in terms of how to pay costs not paid for by Medicare. it could be a stimulus for supplementary LTC insurance,” Chen added.