Our elderly population of 85+ years will increase almost two-fold in the next thirty years. Long-term care expenditures are likely to increase dramatically as well as people live longer.  Although medical breakthroughs will reduce incidences of disabilities, rising life expectancy may increase age-related disabilities such as Alzheimer’s.

Our ability to pay for long term care as our elderly population grows in Vermont is a concern to all of us.  To help address this issue and lessen the dependence on state funding, states are looking at offering tax incentives to encourage people to buy long term care insurance.
 
Contrary to what some may think, long-term expenditures aren’t paid for by Medicare or major medical insurance provided by most employers.  Many people pay for their own nursing home care until they deplete their savings.  Then they turn to Medicaid to pay for long term care.  In most states, about 35 percent of total Medicaid expenditures go to long term care but in Vermont, it’s less because Governor Dean has expanded regular Medicaid coverage to more non-elderly people than the national average.   As the needs of our elderly increase, spending priorities will have to be made in Vermont that could create an intergeneration showdown.
 
Today, long term care costs about $35,000 a year and projections show in the next 30 years, it will rise to about $100,000.  Nationally, the number of nursing home residents will increases and combined with the higher costs, will lead to quadrupling of nursing home expenditures in that time frame.   To put that in perspective, nursing home expenditures in 2030 will equal the size of the entire social security budget today.

It is my contention private long-term care insurance offers a solution to this looming crisis.  As baby boomers age, rising expenditures for Social Security and Medicare will leave little room for expanded public funding of long-term care programs.  More private sector initiatives will be required to allow individuals to deduct the cost of premiums for tax-qualified long-term insurance as medical expenses from their state and federal taxes.

I support long-term insurance tax credits as well as establishing a state partnership for such coverage.  I’ve introduced such a partnership bill in the General Assembly, which protects a person’s assets up to the coverage their long term insurance benefits paid.  When that benefit expires, Medicaid would take over and provide coverage but not use the protected assets for any recovery for medical assistance.  Another bill I introduced offers subsidies to low income Vermonters to purchase long-term care insurance.

With incentives, private long-term care insurance can be affordable.  The insurance companies are offering innovative products that increase options for people.  Also, more employers are offering employees coverage as well.  Successful implementation of a long-term care insurance policy could mean more people would become autonomous and more involved in their health coverage.  It would promote accountability and personal responsibility and would not bankrupt Medicare and Medicaid.
 
Educating the public on its future needs is the first step to ensuring success in aiding all Americans as this new millenium begins.
 

Rep. Frank Mazur
South Burlington