Americans should invest more personally in long-term care, according to two senators who have introduced legislation on this subject.

Sens. Gordon H. Smith (R-OR) and Blanche Lincoln (D-AR) this month introduced a bill that would create a new type of savings mechanism for the purpose of preparing for the costs associated with long-term care services and purchasing long-term care insurance. National spending for long-term care was more than $190 billion in 2004, representing about 12.5% of all personal healthcare expenditures, according to an estimate from the Centers for Medicare & Medicaid Services.

The bill would allow individuals who establish a long-term care trust account to contribute up to $5,000 per year to their account and receive a refundable 10% tax credit on that contribution. Interest accrued on these accounts would be tax-free, and funds could be withdrawn for the purchase of long-term care insurance or to pay for long-term care services. The bill also would allow an individual to make contributions to another person’s long-term care trust account, allowing relatives to help their parents or a loved one prepare for their healthcare needs.