Service Members Home Ownership Tax Act Of 2009
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Mr. KOHL. Madam President, with America aging at an unprecedented rate, and with the high and rising costs of caring for a loved one, the financing of long-term care must be addressed if we are going to get health care costs under control. For those who can plan ahead while they are still healthy, and who can afford it, private long-term care insurance may play a helpful role in enhancing their retirement security--but only if the policies they purchase are sound and the protections are strong.
We all know that long-term care is expensive. The cost of care in a nursing home now averages $75,000 per year. However, most Americans do not realize Medicare provides only very limited assistance through home health services, and that Medicaid will not cover long-term care costs unless their household savings are nearly eliminated. States share the responsibility of providing Medicaid funding for long-term care with the Federal Government, and are also looking for ways to reduce their expenses. As of today, 43 States are in the process of launching ``partnership'' programs, which provide consumers who purchase private long-term care insurance and exhaust their benefits the ability to retain higher assets than are normally permitted if they go on to receive services under Medicaid.
We have a duty to try to ensure that these policies, which often span decades, are financially viable. During the last several years, several long-term care insurance carriers have fallen into financial difficulties, raising questions about how protected policyholders' investments are, and others have sharply raised premiums to compensate for actuarial miscalculations. Such premium increases can be devastating for older persons who are living on fixed incomes. Their choices are often stark and very limited: they can either dig deeper and pay the increased premiums, or let their policy lapse, leaving them with no coverage if they ever need care.
Last year, I was joined by several Senate and House colleagues in releasing a GAO report on whether adequate consumer protections are in place for those who purchase long-term care insurance. The report found that rate increases are common throughout the industry, and that consumer protections are uneven. While some States have adopted requirements that keep rates relatively stable, some have not, leaving consumers unprotected.
The amendment I am cosponsoring with Senators WYDEN and KLOBUCHAR will help mitigate these problems and do a better job of protecting policyholders who buy policies in the future. We need to strengthen standards for all policies to ensure that premiums increases are kept to a minimum; that insurance agents receive adequate training; and that complaints and appeals are addressed in a timely manner. We also need to make it easier for consumers to accurately compare policies from different insurance carriers, particularly with regard to what benefits are covered and whether the plan offers inflation protection. States should also have to approve materials used to market Partnership policies. This amendment will institute these and many other improvements.
It is estimated that two out of three Americans who reach the age of 65 will need long-term care services and supports at some point to assist them with day-to-day activities, and enable them to maintain a high-quality, independent life. Long-term care insurance is an appropriate product for many who wish to plan for a secure retirement. But to be a viable part of the health care solution, we must take the necessary steps to guarantee that consumers across the country have adequate information and protections, and that premiums won't skyrocket down the road.
I am pleased to say that this policy is strongly supported by the National Association of Insurance Commissioners and the Wisconsin Office of the Insurance Commissioner, Consumers Union, Genworth Financial, Northwestern Mutual, the National Treasury Employees Union, and California Health Advocates, which provides support to that state's insurance counseling and advocacy programs.
I urge my colleagues to support this vital amendment.