“State’s long-term care savings plan winding down,” by Don Walton, Scottsbluff Star Herald
“Nebraska’s first-of-its kind long-term care savings plan, which was created by the Legislature in 2006, will come to an end on Jan. 1 due to a low level of participation. . . . Participants could deduct up to $1,000 from their federally adjusted gross income for Nebraska state income tax purposes by depositing an equal amount in a designated account. The program had 519 participants at the end of last year. . . . ‘The worthy goal was to reduce older Nebraskans’ dependency on Medicaid and promote personal responsibility,’ Stenberg said in a letter notifying participants of the program’s approaching end.”
LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform):
The Center for Long-Term Care Reform published The Heartland Model for Long-Term Care Reform in 2003. We recommended that Nebraska:
“Tighten Medicaid long-term care eligibility rules and strengthen Medicaid estate recoveries in order to divert more people to private long-term care financing alternatives and reduce program expenditures. Use some of the savings from these initiatives to fund an educational campaign to wake up the public to the risk of long-term care and the importance of planning early to pay privately if and when extended care becomes necessary. Use some of the savings to finance state tax incentives for the purchase of private long-term care insurance and the use of home equity conversion to pay for long-term care and delay or prevent Medicaid eligibility.”
Unfortunately Nebraska did none of these things, but did set up the target LTC savings program. Predictably that program failed without the measures we recommended.