Long-Term Care Insurance for the Elderly Act of 1993

Summary: Long-Term Care Insurance for the Elderly Act of 1993 - Amends the Internal Revenue Code to allow tax-free distributions from an individual retirement account or an individual retirement annuity for the purchase of long-term care insurance coverage when:  (1) the entire amount received is used to buy such insurance for the individual or individual's spouse within 90 days of its receipt; and (2) the individual or individual's spouse has reached age 59 and one-half by the date of the distribution. 
Describes the method, based on the taxpayer's adjusted gross income for the taxable year, for determining the applicable percentage of the distribution or payment amount to which tax-free treatment will be accorded. 
Requires the Secretary of Health and Human Services to submit to the Congress, within one year after this Act's enactment, a proposal for the regulation of long-term care insurance policies, including minimum standards and an evaluation of the various catastrophic and long-term care policies currently available.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Long-Term Care Insurance for the 
Elderly Act of 1993''.

SEC. 2. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS FOR 
              THE PURCHASE OF LONG-TERM CARE INSURANCE COVERAGE BY 
              INDIVIDUALS WHO HAVE ATTAINED AGE 59\1/2\.

    Subsection (d) of section 408 of the Internal Revenue Code of 1986 
(relating to tax treatment of distributions from individual retirement 
accounts) is amended by adding at the end the following new paragraph:
            ``(8) Distributions to purchase long-term care insurance.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                the applicable percentage of any amount paid or 
                distributed out of an individual retirement account or 
                individual retirement annuity to the individual for 
                whose benefit the account or annuity is maintained if--
                            ``(i) the individual has attained age 59\1/
                        2\ by the date of the payment or distribution, 
                        and
                            ``(ii) the entire amount received 
                        (including money and any other property) is 
                        used within 90 days to purchase long-term care 
                        insurance for the benefit of the individual or 
                        the spouse of the individual (if the spouse has 
                        attained age 59\1/2\ by the date of the payment 
                        or distribution).
                    ``(B) Applicable percentage.--For purposes of 
                subparagraph (A), the term `applicable percentage' 
                means in the case of a taxpayer whose adjusted gross 
                income for the taxable year is--
                            ``(i) not greater than the minimum amount, 
                        100 percent,
                            ``(ii) greater than the minimum amount but 
                        not greater than the maximum amount, a 
                        percentage equal to--
                                    ``(I) the difference between the 
                                maximum amount and such adjusted gross 
                                income, divided by
                                    ``(II) the difference between the 
                                maximum amount and the minimum amount, 
                                or
                            ``(iii) greater than the maximum amount, 
                        zero percent.
                    ``(C) Definitions.--For purposes of subparagraph 
                (A)--
                            ``(i) Long-term care insurance.--The term 
                        `long-term care insurance' means an insurance 
                        policy which at a minimum, provides 
                        reimbursement for expenses incurred by, and 
                        services provided to, the beneficiary for 
                        catastrophic and long-term care at a nursing 
                        facility within the meaning of section 1919(a) 
                        of the Social Security Act (42 U.S.C. 1396r(a)) 
                        and at the home of the beneficiary in the case 
                        of services of a homemaker/home health aide, 
                        personal care services, and nursing care 
                        provided by a licensed professional nurse.
                            ``(ii) Minimum amount.--The term `minimum 
                        amount' means, with respect to any taxable 
                        year, $45,000 increased by an amount which is 
                        equal to $45,000 multiplied by the cost-of-
                        living adjustment (as defined in section 
                        1(f)(3)) for the calendar year in which the 
                        taxable year begins.
                            ``(iii) Maximum amount.--The term `maximum 
                        amount' means, with respect to any taxable 
                        year, $100,000 increased by an amount which is 
                        equal to $100,000 multiplied by the cost-of-
                        living adjustment (as defined in section 
                        1(f)(3)) for the calendar year in which the 
                        taxable year begins.
                            ``(iv) Rounding.--If any amount determined 
                        under clause (ii) or (iii) is not a multiple of 
                        $10, the amount shall be rounded to the nearest 
                        multiple of $10 (or if the amount is a multiple 
                        of $5 and not a multiple of $10, the amount 
                        shall be increased to the next multiple of 
                        $10).''

SEC. 3. REPORT TO CONGRESS ON MINIMUM STANDARDS FOR LONG-TERM CARE 
              INSURANCE POLICIES.

    (a) In General.--Within 1 year after the date of the enactment of 
this Act, the Secretary of Health and Human Services shall issue a 
report to the Congress after consultation with representatives of the 
following:
            (1) Consumer groups.
            (2) Insurance companies.
            (3) Long-term care facilities.
            (4) Hospitals.
            (5) Home health care agencies.
            (6) State commissioners of insurance.
    (b) Contents of Report.--The report required in subsection (a)--
            (1) shall propose a regulatory program which provides for 
        the application of minimum standards and requirements with 
        respect to long-term care insurance policies, and
            (2) should analyze and evaluate--
                    (A) the various catastrophic and long-term care 
                insurance policies available to individuals, and
                    (B) any other areas of examination determined to be 
                appropriate by the Secretary of Health and Human 
                Services.

SEC. 4. EFFECTIVE DATE.

    The amendment made by section 2 shall apply to amounts paid or 
distributed after the 1st day of the 1st calendar year which begins 
after the date of the enactment of this Act.