Senators introduce long-term care insurance bill

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Sen. Larry Craig (R-ID), the chairman of the Senate Special Committee on Aging, and Sens. George Allen (R-VA) and Evan Bayh (D-IN) have introduced a bill that would assist people buying long-term care insurance.

"The Long-Term Care Partnership Program Act of 2004"(S.2077) is modeled after long-term care partnership programs that are currently in place in California, Connecticut, Indiana and New York. The bill would allow additional states to enter into long-term care partnerships – something they have sought to do but have had difficulties with since passage of the Omnibus Reconciliation Act of 1993, Craig said.

Under S. 2077, an individual would purchase a long-term care insurance policy approved by a state government, and in return, the state would guarantee that should the policy benefits be exhausted, the government would cover the costs of continuing care through Medicaid without requiring the senior to spend down his or her personal assets. For the individual, such "partnership policies" allow them to protect their assets, and for state governments, such efforts should help reign in skyrocketing Medicaid costs.

"Far too many people wait until it is too late to find this out and then have to bankrupt themselves in order to qualify for state run Medicaid programs," Craig said. According to his statistics, the average retiree has $30,000 in retirement savings, which would cover far less than a year of private pay bills in most nursing homes.