Long-Term Care Incentives Act of 1991

Long-Term Care Incentives Act of 1991 - Title I: Tax Treatment of Qualified Long-Term Care Insurance Policies - Amends the Internal Revenue Code to provide for the treatment of qualified long-term care insurance as accident and health insurance for purposes of insurance company taxation. Provides for the exclusion as a death benefit of any amount paid to an individual under a life insurance contract because such individual is terminally ill, has a dread disease, or has been permanently confined to a nursing home.

Title II: Tax Incentives for Purchase of Qualified Long-Term Care Insurance - Allows a tax credit for a percentage of qualified long-term care premiums. Allows a deduction for expenses relating to long-term care and an exclusion from gross income of benefits received from long-term care insurance. Allows a deduction for employers of contributions made for long-term care insurance if any refund or premium is applied to reduce the future costs of the plan or increase its benefits. Allows the inclusion of such insurance in cafeteria plans.

Excludes from gross income amounts withdrawn from individual retirement accounts and certain employer cash or deferred arrangements to pay long-term care premiums and expenses. Increases the amounts of deductible contributions to individual retirement plans.

Excludes from gross income amounts received from the surrender, cancellation, or exchange of any life insurance contract if such amounts are used to pay premiums for long-term care insurance.

Authorizes the tax-free use of the gain from the sale of a principal residence for the purchase of long-term health care insurance.

Title III: Medicaid Amendments - Amends title XIX of the Social Security Act (Medicaid) to set forth eligibility requirements for long-term care benefits and to require coverage of home and community-based long-term care.