Health Policy Experts Propose Long-Term Care Coverage Options

In an article recently published in Health Affairs, policy experts propose initiatives that could reform coverage for long-term care services, Modern Healthcare reports.

Background

The number of U.S. adults who need long-term care services is projected to grow to 15.1 million by 2055, an increase of 140%, according to the experts. The costs of such care are largely shouldered by individuals themselves and Medicaid. According to the experts, it costs on average $138,000 to provide the most-intensive, long-term care services to a 65-year-old individual until his or her death. Such services include help with at least two daily activities. According to the experts, Medicaid generally pays for about one-third of such costs for adults ages 65 or older.
Research Details

In the Health Affairs article, the experts proposed three long-term insurance plans and examined each plan's affordability and potential enrollment.

The experts also projected how the plans could affect:

• Individuals' out-of-pocket costs;
• Medicaid spending; and
• Private insurers.

The experts found that voluntary long-term care coverage plans did not do much to help individuals who most need the services unless the plans are subsidized. Further, the experts noted that even if such coverage is subsidized, the number of individuals who enrolled in such plans likely would grow by about 10%, leaving 80% of U.S. adults without long-term care coverage.

In addition, the experts found that voluntary programs would fail or struggle to succeed under high demand from individuals requiring high-cost care. Such demand would drive premium increases, which could dissuade healthy individuals from purchasing coverage. As a result, comprehensive voluntary long-term care coverage options "may not be viable," the experts said.

Meanwhile, the experts found that mandatory long-term care coverage options would be costly. According to the experts, if a payroll tax is implemented to help fund such a program, U.S. workers would be subject to an additional 0.6 percentage points to 1.35 percentage points in taxes on their wages. However, the experts noted the under such a program, Medicaid spending on long-term care would drop by about 40%. Richard Johnson -- director of the Urban Institute's Program on Retirement Policy and a co-author of the research, said that widespread "aversion to mandates" would make such a program difficult to implement.

While the proposed plans' hypothetical effects are not ideal, the experts said they could serve as models for policymakers to consider and refine. The experts wrote, "Policymakers will have to choose between imperfect options that achieve quite different goals" (Evans, Modern Healthcare, 11/16).