Dingell May Seek Jurisdiction Over Insurance

- Health care: NAIFA members report that the cost of health insurance is rising so high it is starting to crowd out expenditures on pensions and other benefits, Kerley says.

Some Democrats want to revive talks about government-run "single-payer" programs, but Congress is likely to delay action on the most politically sensitive health care issues until after the 2008 presidential season, Kerley says.

- Estate tax repeal: "It is hard to believe that the Democrats will allow the proposal for almost full repeal that was before the Senate in early August to pass," Kerley says. "Something less, however, could pass, something that loses perhaps 50% of the current revenues raised by the estate tax."

- Tax reform: Kerley doubts the new Congress will even consider the Bush administration's tax reform proposals, including a proposal to replace a variety of insurance and savings vehicles with a simplified lifetime savings account.

"I would color those 'gone'," Kerley says. "It seems almost impossible that a Democratically-controlled Congress would allow LSAs to be created."

- Long term care insurance deduction: The insurance industry will have a tough time getting an above-the-line deduction for LTC premiums if the Democrats reinstall a "pay as you go" policy on tax cuts, Kerley says.

The pay/go policy would require Congress to use cost cuts or new taxes to offset the cost of any new tax breaks.

But the recently enacted Pension Protection Act includes a provision permitting insurers to combine LTC insurance with life insurance policies and annuities starting Jan. 1, 2010. That proposal should help expand access to LTC insurance coverage, Kerley says.