Full Deduction For Long-Term Care Coverage Means Savings For Consumers And Government


CONTACT: Richard Coorsh

(202) 824-1787

WASHINGTON, D.C. – A 100 percent "above-the-line" tax deduction for purchasing private long-term care insurance would significantly increase the number of Americans protecting themselves against catastrophic long-term care costs, and save the Medicaid program billions of dollars, according to a new study released today by the Health Insurance Association of America (HIAA).

HIAA’s new study shows that a 100 percent above-the-line tax deduction for private long-term care insurance would save the average buyer about $343 a year and would increase sales by up to 24 percent above current projections. Furthermore, the deduction would provide $1.06 in overall Medicaid savings for every dollar that may be lost from tax revenues.

"An above-the-line, 100 percent tax deduction is absolutely essential to make long-term care coverage affordable for more Americans," remarked HIAA President Chip Kahn. "Long-term care costs remain the largest looming unfunded liability facing Americans today, and private long-term care insurance offers the best way to help Americans protect themselves against these potentially catastrophic costs."

"Additionally, a 100 percent tax deduction for long-term care insurance would save taxpayers money, and signal consumers that they must assume personal responsibility for paying their future long-term care costs," continued Mr. Kahn. The average national cost of a year’s stay in a nursing home is more than $40,000 a year, and easily double that amount in large metropolitan areas, according to Mr. Kahn. "Helping people pay these costs is among our nation’s top domestic priorities," he added.

By the year 2030, 70 million Americans likely will have some long-term care needs – more than twice today’s current population of seniors. The new HIAA study notes that currently, about 500,000 new long-term care insurance policies are sold annually, and that a 100 percent tax deduction for private long-term care insurance would increase that number by up to 120,000.

Additionally, increased sales of private long-term care insurance would allow more and more seniors to improve their quality of life. With long-term care coverage, seniors can delay or prevent institutionalization, afford a greater choice of long-term care services or providers, ease financial, physical and emotional burdens on their families, and preserve their assets for their heirs.

HIAA’s study was conducted by Marc A. Cohen, Ph.D., of LifePlans, Inc. (Waltham, Massachusetts); and Maurice Weinrobe, Ph.D., professor of economics at Clark University.

HIAA is the nation’s most prominent trade association representing the private health care system. Its 269 members provide health, long-term care, disability, and supplemental coverage to more than 115 million Americans.


NOTE: The full text of this new HIAA study – "Tax Deductibility Of Long-Term Care Insurance Premiums" – is available at

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