Bill would reform tax code to make long-term care insurance more affordable and accessible
Legislation introduced last week in the House of Representatives would reform the tax code in an effort to make long-term care insurance more affordable and accessible to seniors. It is supported by Argentum and the American Seniors Housing Association.
the Long Term Care Affordability Act was introduced last week by Rep. Ann Wagner (R-MO), chair of the House Suburban Caucus. The bill is the House companion to the tax code legislation introduced in the Senate by Sen. Pat Toomey (R-PA).
“Retirement can be quite expensive for older people, and we should use all the tools at our disposal to make life easier and more affordable for them,” Wagner said. “This legislation would do just that by providing favorable treatment for long-term care through retirement accounts, allowing greater access to the necessary care they deserve.”
The law would allow people to withdraw funds from their 401(k), 403(b) accounts and individual retirement accounts to pay for long-term care insurance. Up to $2,500 of a withdrawal used to pay for long-term care insurance would be exempt from income tax each year. In addition, such withdrawals would be excluded from the 10% early withdrawal tax penalty.
“Argentum is proud to support the Long Term Care Affordability Act, a law aimed at helping more Americans be better prepared financially for their long-term care needs,” Argentum President and CEO James Balda said McKnight Senior Residence.
About 10,000 people now turn up every day in the United States, and it is estimated that up to 70% will need some form of care in their lifetime, he added. According to Wagner, individuals at all income levels could take advantage of the tax benefit.
“Unfortunately, too few Americans have enough savings for their retirement, let alone their health and personal care,” Balda said. “We commend Senator Toomey and Congresswoman Wagner for their leadership in helping more Americans better access the tools to meet their future care needs.”
Other groups supporting the legislation include the Alzheimer’s Association, Alzheimer’s Impact Movement, America’s Health Insurance Plans, Edward Jones, Long-Term Care Insurance Partners, National Association of Insurance and Financial Advisors, National Association of Insurance Commissioners and the National Association of Health Insurers.