U.S. Rep. Ann Wagner (R-MO) on March 16 sponsored legislation that aims to help make long-term care insurance more affordable and accessible for America’s senior citizens.
Specifically, the Long Term Care Affordability Act, H.R. 7107, would amend the Internal Revenue Code of 1986 to expand the use of retirement plan funds to obtain long-term care insurance, according to the congressional record bill summary.
“Long-term care is often an insurmountable cost for many seniors who need a home health aide or similar care,” Rep. Wagner said. “My Long Term Care Affordability Act will enable seniors to cover the cost of long-term care by providing better access to retirement savings.”
H.R. 7107 is the U.S. House companion bill to the same-named S. 2415, which U.S. Sen. Patrick Toomey introduced in July 2021.
If enacted, the measure would allow individuals to withdraw funds from their 401k, 403b, and IRAs to pay for long-term care insurance, according to a bill summary provided by Rep. Wagner’s staff. Additionally, the bill would exclude the withdrawal from income tax to the extent it is used to pay for long-term care insurance up to $2,500 annually, and exclude the withdrawal from the 10 percent early withdrawal penalty tax.
“Retirement can be expensive enough for seniors, and we should be using every tool we have to make their lives easier and more affordable,” said Rep. Wagner. “This legislation would do just that by providing for favorable treatment of long-term care through retirement accounts, allowing greater access to the necessary care they deserve.”
The bill has garnered the support of numerous organizations, including the Alzheimer’s Association, America’s Health Insurance Plans, the National Association of Insurance and Financial Advisors, and the National Association of Health Underwriters, among others.