Legislative Initiatives Affecting Elderly Clients


Congress, led by the Republican majority in both houses, continues to debate and promote “reform” of the Medicare and Medicaid programs. Simultaneously, discussion about the future of the Older Americans Act, the Nursing Home Reform Act and the Legal Services Corporation rages in Congress and between legislators, Administration figures and a concerned public.

Almost lost in the furor is the fact that other issues of concern to elderly citizens are being actively discussed in Congress at the same time. Two areas of current debate: the rights of grandparents in foster care placements and the estate and gift tax structure.

Foster Care Placement

The Kinship Care Act of 1995 would require states to involve adult relatives in placement decisions for dependent children. It would make relatives (including grandparents) the “preferred placement option” for parentless children, and would ease regulations governing financial assistance to relatives who act as foster parents.

If passed, the Kinship Care Act would encourage states to develop plans for dealing with the needs of families headed by grandparents. It would provide no new services, and would have no budget impact.

The Act has been introduced by both Democratic and Republican Representatives, but is unlikely to be voted on before next year.

Estate and Gift Tax

Under current rates, estate are due only on estates larger than $600,000. While that number is large, and most estates escape taxation, the threshold has not changed since 1987, despite steady (though gradual) decreases in the value of money.

House Republicans have revised the exemption figure. Under their proposal, the exemption would increase to $700,000 in 1996, then continue to increase as follows:



1999 and beyond–$750,000 adjusted annually for inflation.

The Senate has adopted similar, though slightly less generous, provisions. Since these changes are part of the negotiation over balancing the budget, they are likely to be adopted in some form by Congress’ December 15 deadline.

Long Term Care Insurance

Meanwhile, one jurisdiction is taking a leading position encouraging the use of long-term care insurance. While Congress debates mechanisms to increase the number of insured patients in nursing homes, New York State has enacted a tax deduction for the payments on insurance premiums. Policies which meet certain minimum criteria (including three years of coverage, home care benefits and adequate coverage amounts) will entitle the purchase to deduct a portion of the premium from income for state tax purposes.

Those deductions are keyed to the taxpayer’s age, and start at $750/year for 55-year-olds and increase to $2500/year for those over age 70. One problem: most of the policies currently available in New York willnot qualify for the deduction.

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