House Republicans will offer tax breaks to people buying long-term-care insurance or caring for disabled elderly people at home as part of a tax package that may be released as early as this week.
Under the proposal being drafted by Ways and Means Committee Chairman Bill Archer (R-Texas), taxpayers could deduct 100% of the cost of their long-term-care insurance premiums from their taxable income. That deduction will be phased in over 10 years.
The proposal also would allow employees to receive long-term-care insurance coverage tax-free under flexible benefit plans. People providing care for disabled family members at home, meanwhile, also could take advantage of a tax break.
Archer's plan ups the ante in negotiations with President Clinton over healthcare-related tax cuts. The White House fiscal-2000 budget proposal included a more modest long-term-care benefit: a $1,000 tax credit to people with chronic-care needs or their families caring for them.
"The need for long-term care in America is great and will only grow larger as the baby boomers start retiring in the next decade," Archer said. "My plan will help make long-term care more affordable for millions of Americans and will also help those caring for their parents or loved ones at home."
Archer said his plan will include other healthcare tax relief initiatives, which he hasn't specified.
Under provisions of the congressional budget resolution, Ways and Means must approve a tax relief bill by July 16.