Rep Tom Suozzi (D-NY) has introduced a bill to create a public, catastrophic, long-term care insurance program. The monthly cash benefit, initially about $3,600 and indexed for inflation, would be funded with a modest increase in the payroll tax of 0.3 percent for workers and 0.3 percent for employers, or roughly $300-a-year for a median wage worker.
A LTC benefit equal to $43,200 per year funded by only 6/10 percent payroll tax? Good luck with that. There is a reason why many insurance companies want you to drop your LTC insurance and are raising premiums rapidly. Mine went up 46% last year and 26% this year. That’s because the insurance risk is too high to be affordable.
And then there is this; higher payroll taxes for a new liability before we have resolved the solvency of Social Security and Medicare. It will take a lot more than 3/10 percent to make Social Security sustainable.