Arizona Lawmakers Pass Pre-Tax Long-Term Care Savings Plan

A bill has passed in the Arizona Senate that aims to make long term healthcare more affordable for those middle-income families who need it by offering a pre-tax long-term care savings option.

The bill, introduced earlier this year and sponsored by Rep. Steve Farley (D-Tucson), allows for a subtraction of long-term care insurance premiums and amounts deposited into a long-term care savings account from Arizona gross income.

“Right now, our middle-class families are struggling to make ends meet, and seniors’ long-term care expenses, now averaging more than $72,000 a year out of pocket, are pushing many to the edge of poverty,” Farley said. “The number of Americans needing long-term care is expected to triple by 2040. If we do not find ways to provide for that care right now, we will be facing a huge crisis for our seniors, our national budget, and our economy. This bill gives families an important tool to alleviate that crisis.”

Under the terms of the bill, a taxpayer may receive the tax benefit if he or she establishes a long-term care account with an account administrator, and uses the account for long-term care costs only. If the taxpayer makes any non-long-term care withdrawals, there is a 10% penalty associated with the withdrawal.

The savings can be used for non-hospital expenses such as in-home healthcare, assisted living, nursing care and others.

“It’s a good option to help Arizona families plan for future health-care expenses,” Farley said. “It’s also a step in the direction of a tax code that’s fair for Arizona seniors and the families that care for them. Now we should push Congress to act as well.”

View the bill.

Written by Elizabeth Ecker

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Elizabeth Ecker
Director of Content at Home Health Care News
Curious about all things, when not writing about senior housing topics, Liz is an avid explorer of food. She loves trying new recipes, new restaurants and new ice cream flavors. (Current favorite: Goat cheese with red cherries.)

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