The Trump administration is considering regulatory changes and new tax subsidies to encourage middle-income Americans to buy private long-term care insurance, according to the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution.
Possible changes, which could be announced later this year, according to the center, include:
- Updating federal rules to allow an expansion of products that combine life insurance or annuities with long-term care insurance.
- Allowing the sale of life or disability policies that convert to long-term care coverage.
- Expanding a tax deduction that consumers could use to buy long-term care policies.
- Creating a new product similar to a health savings account but for long-term care insurance.
- Permitting penalty-free withdrawals from retirement savings accounts for the purchase of long-term care insurance.
Fifty-four percent of the 14.4 million middle-income older adults in 2029 in the United States will lack the financial resources to pay for senior housing and care, and a combination of public and private efforts will be needed to address the looming crisis, projected a study funded by the National Investment Center for Seniors Housing & Care and published online in April by the journal Health Affairs.
The aforementioned ideas under consideration by the federal government, however, “are unlikely to build much interest among those with middle-incomes,” according to the Tax Policy Center, which described the likely changes as “very modest.”
