U.S. Senator Daniel K. Akaka (D-Hawaii) praised the passage last night of the Long-Term Care Security Act of 2000, which he cosponsored. Earlier this week, the Senate unanimously passed its long-term care bill, S. 2420, by substituting the text of its measure in the House bill, H.R. 4040. The House, in turn, passed H.R. 4040, as amended by the Senate yesterday evening; the Senate took final action last night on the measure and cleared it for the President.
The bill provides employee-paid long-term care insurance at group rates for federal and Postal employees, uniformed service members, National Guard, reservists, and retirees, as well as their parents, spouses, parents-in-law, and adult children. "Passage of this bill sets a prudent course for our nation's long-term care needs," Akaka said. "Many people mistakenly believe that Medicare and their health insurance programs will pay for long-term care. Sadly, they do not," he noted.
Akaka added, "Despite Hawaii having one of the highest life expectancies at 79 years, the State's rapidly aging population will impact available resources for long-term care, from both institutional and non-institutional sources. This bill not only helps federal employees, members of the military, and their families, it serves as an excellent model for the private sector."
Senator Akaka, who cochaired a Senate hearing on long-term care insurance in May, played a leadership role in moving the bipartisan long-term care insurance bill toward passage. The Hawaii lawmaker is the ranking Democrat on the Senate Subcommittee on International Security, Proliferation, and Federal Services, with direct jurisdiction over the bill. Throughout the debate over the need to plan for the nation's long-term care demands, Akaka has maintained that there is an overriding need to help American families provide dignified and appropriate care to their parents and relatives. "We know that the demand for long-term care will increase with each passing year, and that federal, state, and local resources cannot cover the expected costs. Nursing home costs, which now generally range from $40,000 to $49,000 per year, are expected to reach $97,000 by the year 2030," he explained.
In addition to championing long-term care insurance for the federal family, Akaka joined with a bipartisan group of Senators this week to introduce S. 2935, the Omnibus Long-Term Care Act of 2000. The bill will authorize phased-in tax deductions for the premiums of qualified long-term care insurance policies and create a national public information campaign to educate employers and employees about the benefits of long-term care coverage, among its provisions.
The long-term care measure passed last night also includes provisions of a bill, S. 1232, the Federal Erroneous Retirement Coverage Corrections Act. The measure, passed by the Senate last year and sponsored by Senator Akaka and Senator Thad Cochran (R-MS), will provide relief for federal employees who were placed in the wrong retirement system during the transition from the Civil Service Retirement System (CSRS) to the Federal Employees Retirement System (FERS) in the mid-1980s. Under the current statutory process, federal agencies have no choice but to correct a retirement coverage error when it is discovered, effectively forcing employees into a new retirement plan. "Unfortunately, the correction of a retirement coverage error can have a harmful impact on an employee's financial ability to plan for retirement," Akaka noted.
"The retirement corrections portion of the long-term care insurance bill will correct the erroneous pension problem facing an estimated 10,000-20,000 federal employees without disturbing Social Security coverage laws," said Akaka. It would allow affected employees a choice between corrected retirement coverage and the coverage the employee expected to receive. For each type of retirement coverage error, individuals are afforded the opportunity to maintain their expected level of retirement benefits without a change in their retirement savings and planning. Among other provisions, the bill also provides that certain employees who missed an opportunity to contribute to the Thrift Savings Plan (TSP), the government's 401(k)-style pension plan, due to a coverage error may receive interest on their TSP make-up contributions. Both long-term care and retirement corrections legislation have the strong support of the Clinton Administration and the federal employees unions.
