Legislative Session Update - Week 3

Long Term Care Savings

The Senate Committee on Seniors, Families and Children held a hearing on Senate Bill 580 this week, sponsored by Senator Mike Cierpiot (R-Lees Summit). SB 580 would use tax incentive to encourage Missourians to plan and save for their long term care needs as they age.

Currently, over 60% of long term care costs are covered by Medicaid, which is the most costly service currently provided through the Missouri Medicaid program. If we can encourage consumers to save for long term care, or purchase long term care insurance, we can significantly reduce State costs, and ensure that consumers direct how and where they want those services to be provided.

In recent years, long term care insurance has become too costly and ineffective for aging Missourians, the very people who most need that insurance.

Encouraging people to save is essential. The only thing that AARP would add to this important legislation is that there should be a “public option” similar to the Missouri MOST 529 plan that would serve as a check and balance to private plans to keep costs low while protecting savings. We would suggest that such a plan be controlled by State Treasurer Fitzpatrick and those who choose that option be given the same tax benefits as those who invest in private options.

Water Utility Surcharge

Both the House and Senate held hearings on legislation that would increase and expand surcharges on Missourians who get water services from Missouri American Water. House Bill 2094, heard in the House Utilities Committee and Senate Bill 592, heard in the Senate Commerce, Consumer Protection, Energy and the Environment Committee, would raise costs on consumers by allowing private monopoly water utilities to implement a surcharge to fund infrastructure improvements.

The water infrastructure surcharge was introduced in 2003 because Missouri American Water had allowed pipes in St. Louis County to degrade to the point that they desperately needed repair. While this was a failure on their part, not their ratepayers, consumers paid the cost for their negligence.

These bills would drastically expand this surcharge which would take money directly out of Missourians’ pockets with no direct benefit seen in water delivery, directly impacting our state’s economy, benefiting American Water shareholders, but not average Missourians.

AARP urged legislators to stand by the agreement that large monopoly utilities made when they agreed to offer low-cost, reliable services in exchange for lack of competition rather than give a huge payout to a corporation that has failed to live up to their legal requirements.