The chairman of the House Ways and Means Committee yesterday called for the federal government to begin offering tax breaks to make long-term health care more affordable for elderly people with disabilities or lasting illnesses.

The proposal by Rep. Bill Archer (R-Texas) eventually would allow people who buy long-term care insurance to deduct the entire expense of those premiums from their taxes. It also would give tax breaks to Americans who care for elderly relatives at home, and seeks to give employers incentives to include insurance for long-term care among the benefits they offer to their workers.

Archer's efforts to lessen the burden of paying for nursing homes and other long-term health care will be part of a House GOP tax package that could total more than $800 billion over the next decade.

The Republican tax plan, which will be taken up by the Ways and Means Committee when Congress reconvenes next week, would also reduce taxes on income, capital gains and inheritances. Other provisions would eliminate tax penalties for married couples and create tax incentives for people to open savings accounts for education expenses and for retirement.

Republicans are touting the plan as the best use for large federal budget surpluses that government analysts expect to materialize in coming years. Democrats generally argue that tax cuts be smaller, and that shoring up Social Security and Medicare are higher priorities.

On health care, Archer's plan offers changes for which the health insurance industry has been lobbying hard -- but the approach was questioned yesterday by an advocacy group for the elderly. The GOP plan also responds to a Clinton administration proposal last winter to give a $1,000 yearly tax credit to patients with long-term medical needs or the relatives who care for them.

The Republican proposal includes somewhat larger tax breaks than Clinton envisions, but it restricts them to relatives -- not patients themselves. The more fundamental difference between the parties' approaches, however, is that the GOP is emphasizing private insurance for long-term care, a relatively new type of insurance policy currently held by 3.5 million to 4 million Americans.

More federal encouragement for long-term care insurance "is the most important public policy we can have right now to help us alleviate eventual problems relating to long-term care," said Charles N. Kahn III, president of the Health Insurance Association of America, which has been lobbying for such a provision.

The association contends that the tax relief would markedly increase the number of Americans who can afford such insurance, and ultimately would reduce government expenditures on nursing home care for the elderly. Nursing home care can cost as much as $50,000 annually.

Maryanne Keenan, a lobbyist specializing in long-term care for the AARP, a group representing retired people, said Archer's proposal would help a relatively small number of Americans, because such insurance is so expensive that most of the people who buy it are at least upper-middle class.

An Archer spokesman said yesterday that the committee's tax staff has not finished calculating the proposal's exact price tag. He said preliminary estimates suggest the tax deductions for insurance premiums would cost "several billion" over the next decade, while the exemptions for caregivers would cost roughly $2 billion to $3 billion a year.