Providing Long-Term Care Insurance to Federal Workers

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Providing Long-Term Care Insurance to Federal Workers and Urging Congress to Assist All Americans with Long-Term Care Needs

September 19, 2000

"Over time, this legislation will help more and more families to meet the challenge of caring for our parents and grandparents, and others in our families that need long-term care."

President Bill Clinton
September 19, 2000

Today, at the White House, President Clinton signed into law the Long-Term Care Security Act, which authorizes the Office of Personnel Management (OPM) to negotiate with private insurers to offer more affordable, high quality, long-term care insurance to federal employees, retirees, and their families. This initiative will provide a new insurance option to 13 million Americans and serve as a model program for private employers throughout the nation. The President urged Congress to assist the millions of Americans with long-term care needs who are unable to purchase private long-term care policies by passing his $3,000 tax credit for the chronically ill, reauthorizing and strengthening the Older Americans Act, and passing a long-overdue, voluntary Medicare prescription drug benefit.

THE IMPORTANCE OF ADDRESSING LONG-TERM CARE NEEDS. Providing Americans with long-term care options is becoming increasingly important because:

Over 5 million Americans have long-term care needs due to illness or disability;

The number of Americans age 65 or older will double by 2030, and the number of people 85 or older – nearly half of whom need assistance with everyday activities – will grow even faster;

Only about 4 million Americans – or 1.5 percent – have private long-term care insurance; and

Family caregivers pay a high price for providing long-term care: one study found that the economic value of caregiving for families ranges from $4,800 to $10,400 per caregiver.

PROVIDING LONG-TERM CARE INSURANCE TO FEDERAL EMPLOYEES. The Long-Term Care Security Act, the legislation President Clinton signed today, provides the 13 million federal employees, retirees, and their families with a new option to purchase non-subsidized, quality private long-term care insurance. This new option covers a range of services at group rates, including home health care, adult day care, and nursing home care. The legislation allows OPM to use its purchasing power to negotiate savings of 15 to 20 percent on commercial long-term care insurance rates and to ensure that such products meet high quality standards. It also provides private-sector companies with a model for offering quality long-term care insurance to their employees. OPM anticipates that nearly 300,000 federal employees will participate in the program.

URGING CONGRESS TO HELP AMERICANS WHO NEED LONG-TERM CARE ASSISTANCE. President Clinton challenged Congress to act on the Administration's long-term care initiative, which includes:

Supporting people with long-term care needs and their families through a $3,000 tax credit. This new tax credit would provide needed financial support to about 2 million Americans;

Reauthorizing the Older Americans Act and strengthening it by funding the Family Caregivers Program, which supports families who care for elderly relatives with chronic illnesses or disabilities. This program would assist approximately 250,000 families nationwide; and

Passing a new, voluntary Medicare prescription drug benefit. Seniors who lack prescription drug coverage can become institutionalized at twice the rate of those with prescription drug coverage. For this reason, a meaningful, affordable, voluntary Medicare prescription drug benefit is a critical component of an effective long-term care strategy.

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