Nebraska senators eye incentive for long-term care insurance

February 21, 2018

LINCOLN, Neb. (AP) — Faced with an aging population and rising costs, Nebraska lawmakers are looking for new ways to reduce the number of residents who might rely on Medicare and Medicaid in the future.

Sen. Merv Riepe of Ralston presented the measure to the Legislature’s Revenue Committee on Wednesday, saying it would encourage younger residents to purchase private coverage to help pay for their care.

“Many Nebraskans put off planning for long-term care, hoping they will never need it,” Riepe said.

The bill would allow residents to claim an income tax credit equal to 25 percent of the premiums paid for a long-term care insurance policy, up to $250 for an individual and $500 for a joint policy. Residents could only claim the credit if they were not previously enrolled in a plan, and they would no longer receive it after three years.

A legislative task report released in 2014 noted that fewer than 10 percent of Americans are saving for long-term care, yet after reaching the age of 65, the average American has a 70 percent chance of needing long-term care services. The bipartisan task force warned that lawmakers will need to explore new options to contain rising Medicaid costs and an elderly population that’s expected to grow over the next several decades.

The bill’s prospects are uncertain this year given the state’s projected $173 million revenue shortfall, which lawmakers will address this session. If it passes, Nebraska would join 28 other states that provide tax credits for long-term care coverage, said Galen Ullstrom, a lobbyist for Mutual of Omaha.

Ullstrom said most people don’t believe they need long-term care insurance and end up receiving coverage through Medicare and Medicaid, placing an additional burden on the state.

More than 12,000 elderly Nebraskans lived in nursing communities as of last year, and more than half of them relied on Medicaid to pay for the service, said Jeremy Hohlen, CEO of LeadingAge Nebraska, a group that represents nonprofit housing and service providers for the elderly.

“By 2050, the number of Nebraskans needing elder care will outnumber Nebraskans needing day care,” Hohlen said. “Anything that can be done to help educate and encourage Nebraskans to invest in long-term insurance is a most worthwhile and important endeavor.”

Still, some residents questioned whether the tax credit was enough to make long-term care affordable. Donna Roller of Lincoln told lawmakers she and her husband looked into a long-term care plan but couldn’t afford it.

“You want young families to invest in this?” she asked. “They’re saving for their kids’ college.”

The committee took no action on the bill Wednesday.


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