HEARING - U.S. Senate Special Committee on Aging

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worth of products in the private market; (4) increased access
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for all of the Medicare-eligible population to long-term care
coverage because no applicants would be turned down. (In
contrast, the private market will not be able to accommodate all
applicants). Drawbacks would include a reduction in the array.
of choices available to consumers.
(b) Medicare coverage of long-term care. For the sake of
completeness, we believe that the Report should have included
analysis of the option of expanding Medicare to cover long-term
care coverage for all of the Medicare-eligible. The Harvard
Medicare Project discusses this option [See Medicare: Coming of
Age--A Proposal for Reform, pp. 20 - 31.] Even if this option
included cost-sharing, it is likely to require a significant
amount of additional money from the federal budget.
II. THE REPORT'S RECOMMENDATIONS PLACE INAPPROPRIATE RELIANCE
ON THE TAX SYSTEM.
Despite the tax policy established in the recent tax
reform act, some of the Report's recommended options involving
long-term care use the income tax system to subsidize the
purchase of insurance. (See section II (B) above for a brief
description of proposals for tax-favored Individual Medical
Accounts and tax credits for private long-term care insurance.)
Consumers Union supports the use of the tax system to promote
worthy social goals when (1) the social good to be obtained
exceeds the cost, and (2) the benefits and the costs of the
program are equitably distributed. We do not believe that the
recommendations in the Bowen Report regarding tax-favored IMAs
and tax credits for long-term care insurance meet these tests.