Wisconsin considers tax-protected long-term care accounts
Wisconsin residents will be able to invest in long-term care funds set up like popular, state-based college savings plan, if legislators get their way.
A bipartisan bill making its way through the state assembly would allow people to contribute $5,500 to $8,500 per year, depending on age, and withdraw the money tax free for qualified long-term care.
“Everybody wants to find some solutions to help elderly folks live out their final days in a better way, with respect and comfort,” State Rep. David Murphy (R-Greenville) told the Wisconsin State Journal.
The sponsors and aging advocates who helped draft the bill describe it as an alternative to costly long-term care insurance designed to meet needs not covered by Medicare.
But even as Wisconsin moves forward, Nebraska has cancelled its long-term care plan — the first of its kind in the nation — due to lack of participation.
Created in 2006, the Nebraska program allowed participants to deduct up to $1,000 from state taxes if they saved that amount or more.
But the program had just 519 participants at the end of last year, when the state legislature voted unanimously to disband it.
Participants have been allowed to withdraw their money penalty-free since Jan. 1 or can leave it invested as a savings account, according to the Lincoln Journal Star.
Based on the activity level in Nebraska, Wisconsin officials project a program in their state would attract about 1,300 people and cost about $360,000 annually in lost tax revenue.