Tax Break Proposed for Long-Term Care

An annual tax credit of $1,000 is at the heart of a new proposal by President Clinton to help Americans who need long-term care in a nursing home or at the hands of family members.

Frail or disabled individuals who cannot care for themselves, or family members who care for them, would be eligible for the tax credit, which would help those coping with the financially ravaging effects of Alzheimer’s disease, strokes and severe physical disabilities. Younger adults and children who need long-term care also would benefit.

The tax credit — which would cost an estimated $5.5 billion over five years — is one aspect of a proposal to offset the cost of providing long-term care. Under the proposal — the largest new domestic initiative in Clinton’s fiscal 2000 budget — states and local agencies on aging also would receive $625 million over five years to give support and respite care to family caregivers.

The program would help fill a crevice between the government’s principal mechanisms for subsidizing health care: Medicare, the health insurer for older Americans, which does not cover long-term custodial care either in nursing homes or at home; and Medicaid, which does cover such care, but is limited to low-income Americans.

Health care lobbyists laud the initiative, asking who could oppose giving help to families caring for seriously disabled loved ones.

Critics say the program, which requires congressional approval, is just a drop in the bucket given the high cost of long-term care. Besides, they say, the tax credit would not help the 40 percent of older people who earn too little income to pay taxes.