Research Report A Proposal to Finance Long-Term Care Services through Medicare with an Income Tax Surcharge
Richard W. Johnson, Leonard E. Burman
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This paper proposes to expand Medicare to cover comprehensive long-term care services, including home care and custodial nursing home care. These services would be financed by a surcharge on federal income taxes. Unlike the regressive payroll tax that finances Medicares hospitalization coverage, the proposed surcharge would not increase tax burdens for low-income people. Beneficiaries would share costs through deductibles and copayments, but the program would include stop loss coverage and special protections for low-income adults. By providing long-term care insurance that protects the assets of older adults, our proposal would eliminate the savings disincentives inherent in the means-tested Medicaid system.
Research Areas Health and health care Aging and retirement Taxes and budgets
Tags Medicare Medicare and private health insurance Long-term services and support Health insurance Individual taxes Federal budget and economy Retirement policy
Policy Centers Urban-Brookings Tax Policy Center