Statements on Introduced Bills and Joint Resolutions
Floor Speech
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - November 13, 2007)
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Mr. GRASSLEY. Mr. President, Saturday, November 10, marked the last day of Long-Term Care Awareness Week--this was a week where our Nation recognized that now more than ever, Americans need to pay attention to long-term care issues. My colleagues Senators Lincoln, Snowe, Stabenow, Smith and I couldn't think of a better way to cap off the Week than by introducing the Long-Term Care Affordability and Security Act of 2007.
Our Nation is graying. Research shows that the elderly population will nearly double by 2030. By 2050, the population of those aged 85 and older will have grown by more than 300 percent. Research also shows that the average age at which individuals need long-term care services, such as home health care or a private room at a nursing home, is 75. Currently, the average annual cost for a private room at a nursing home is more than $75,000. This cost is expected to be in excess of $140,000 by 2030.
Based on these facts, we can see that our Nation needs to prepare its citizens for the challenges they may face in old age. One way to prepare for these challenges is by encouraging more Americans to obtain long-term care insurance coverage. To date, only 10 percent of seniors have long-term care insurance policies, and only 7 percent of all private-sector employees are offered long-term care insurance as a voluntary benefit.
Under current law, employees may pay for certain health-related benefits, which may include health insurance premiums, co-pays, and disability or life insurance, on a pre-tax basis under cafeteria plans and flexible spending arrangements, FSAs. Essentially, an employee may elect to reduce his or her annual salary to pay for these benefits, and the employee doesn't pay taxes on the amounts used to pay these costs. Employees, however, are explicitly prohibited from paying for the cost of long-term care insurance coverage tax-free.
Our bill would allow employers, for the first time, to offer qualified long-term care insurance to employees under FSAs and cafeteria plans. This means employees would be permitted to pay for qualified long-term care insurance premiums on a tax-free basis. This would make it easier for employees to purchase long-term care insurance, which many find unaffordable. This should also encourage younger individuals to purchase long-term care insurance. The younger the person is at the time the long-care insurance contract is purchased, the lower the insurance premium.
An aging Nation has no time to waste in preparing for long-term care, and the need to help people afford long-term care is more pressing than ever. I look forward to working with Senators Lincoln, Snowe, Stabenow, Smith and all of our Senate colleagues toward enacting the Long-Term Care Affordability and Security Act of 2007.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
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