The Treasury and other federal agencies should do a better job educating consumers about long-term care and the need to finance it. That’s according to a report released last week by the Federal Interagency Task Force on Long-Term Care Insurance. The analysis, which summarizes two years worth of LTC insurance system review, noted that the Financial Literacy Education Commission should include long-term care planning among its retirement education topics. 

“Decisions about [long-term care] are complex, unpredictable, and often made more challenging by social and emotional hurdles to planning for possible disability,” the report stated. “In addition, long-term care insurance can be difficult to understand and easy to avoid. Planning for LTC costs and ways to pay for them should be included as part of other financial education on planning, saving, and investing for retirement.”

The task force was made up of senior officials from the departments of Treasury, Health and Human Services, and Labor, as well as the Office of Management & Budget. In addition to financial literacy, the group also suggested that Congress grant the Treasury the authority to lower the level of required inflation protection included in private LTC policies, as a way to reduce premium costs. 

The task force shot down an opt-out model for employer-based LTC insurance and also rejected proposals to allow consumers to purchase coverage within their 401(k) or 403(b) retirement plans, changes to the way states approve premium increases, or any form of public LTC insurance. It also refused to endorse a new income tax deduction for premiums, allowing taxpayers to buy LTC insurance through a flexible savings account or creating a health savings account-type program for LTC insurance.