CRAIG INTRODUCES LONG-TERM CARE LEGISLATION "Long-term care can draw down a senior’s bank account in a very short time. This legislation will give seniors peace of mind," Craig says
(Washington, DC) U.S. Senator Larry Craig (R-Idaho) announced today that he has been joined by Sens. Evan Bayh (D-Indiana) and George Allen (R-Virginia) in introducing new legislation designed to help those purchasing long-term care insurance.
“Experts estimate that four out of ten people who reach the age of 65 will need long-term care at some point, and many people mistakenly believe that the federal Medicare program will cover the cost of long term care. But the reality is that Medicare only covers nursing home costs for a short period following a hospital stay,” said Craig, who serves as chairman of the Senate’s Special Committee on Aging.
“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. That’s a large reason the National Governors Association, led by Idaho Governor Dirk Kempthorne, has made long-term care reform one its top priorities. Private insurance can help you cover your nursing home care and this new legislation offers a way to make long-term care more affordable,” Craig said.
The Chairman of the Senate’s Special Committee on Aging said his legislation, "The Long-Term Care Partnership Program Act of 2004”(S.2077), is modeled after long-term care partnership programs that are currently working in four states – California, Connecticut, Indiana, and New York. Craig’s 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.
Under Craig’s bi-partisan bill, 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. 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.
“Long-term care can draw down a senior’s bank account in a very short time. This legislation will give seniors peace of mind,” Craig said.
According to the National Governors Association, state Medicaid programs currently pay the largest percentage (44%) of all long-term care costs in the United States. Out-of-pocket expenses by individuals and families are next (23%), and federal Medicare (16%) is the third largest payer. The national average cost for a semi-private nursing home room is now around $57,000 per year and the average stay is 2.3 years.
The average retiree has $30,000 in retirement savings, clearly not enough to self-fund even a relatively short stay in a nursing home.
