A member of the U.S. House Ways and Means Committee said Wednesday that he wants to help set up a federal catastrophic long-term care insurance (LTCI) program.
Rep. Tom Suozzi, D-N.Y., talked about the catastrophic proposal Wednesday, during a session at the Insured Retirement Institute’s 20 in 21 conference.
IRI is presenting the conference in the form of 20 sessions that will take place between now and May 5. Suozzi appeared in a session on how Congress can strengthen retirement security.
The other lawmaker who appeared during that session, Rep. Kevin Brady, R-Texas, told the moderator, Srinivas Reddy of Principal Financial Group, that he’s optimistic about Congress’s ability to pass retirement legislation.
“There are far more bipartisan issues in Congress than the media would ever allow you to see,” Brady said.
Republicans and Democrats have worked especially well together on retirement issues, Brady said.
Suozzi, who appeared alongside Paul Richman, IRI’s chief government and political affairs officer, talked about a variety of ideas for encouraging Americans to save and employers to offer more retirement plans.
Suozzi then talked about long-term care planning. He said he learned about the topic when his own parents used LTCI coverage to pay for care in their old age. “Too many people don’t do that,” he said.
Suozzi said that use of private LTCI coverage is too low because the policies are too expensive, and that policies are too expensive because the cost of providing coverage for people who will need care for 18 months or more drives up the premiums.
Suozzi said the country needs a federal catastrophic LTCI program that wraps around private LTCI coverage:
- The program could kick in after lower-income people have needed long-term care services for at least year, and it could start paying for care for the highest-income people after those people have needed care for at least five years.
- Benefits payments would start at $3,600 per month.
- Financing could come from an 0.25% payroll tax on employers and a 0.25% payroll tax on workers.
Suozzi added he would like to see the program help private insurers introduce new types of LTCI products, rather than crowding private insurers out of the LTCI market.
By Allison Bell: thinkadvisor.com