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Insurers Bring LTC Ideas To Congress

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Congress must establish a quality agenda for long term care as one of its critical next steps in making long term care affordable, Karen Ignagni, president of America’s Health Insurance Plans, told Congress.

Ignagni made her comments as one of those testifying before the House Energy and Commerce Subcommittee on Health on identifying solutions for the nation’s current and future LTC needs.

At the same time, Greg Jenner, executive vice president for taxes and retirement security of the American Council of Life Insurers, explained to the panel how a provision in pending pension reform legislation now being considered can help the insurance industry gain greater market penetration for products that allow consumers to pay for their LTC needs.

“Private insurance currently pays for 8% of total nursing home expenditures but 36% of overall health expenditures,” Jenner said. “There is clearly a large gap in the financing of long term care services that private insurance can fill.

“Our goal, as well as the goal of Congress, should be to find ways for the average consumer to plan for the ever-increasing need for long term care through the private sector instead of through government programs,” Jenner said.

Ignagni put it this way: “While Medicare and Medicaid already are burdened by high costs, public programs designed to meet the needs of the elderly will become increasingly strained in the years ahead. One of the crucial questions facing policymakers, therefore, is how to create an appropriate balance between public and private responsibilities–between the obligation of government to provide a safety net for those who need it and the obligation of citizens to provide for themselves to the extent they are able to do so,” Ignagni added.

In her testimony, Ignagni said a priority for Congress is to establish a “quality agenda” for LTC through systems for measuring and reporting “across the continuum of services and settings.” Other factors should include performance-based payment, taking into account consumer satisfaction, health literacy and progress in addressing disparities in LTC care.

“Recognizing the efforts under way by the Ambulatory Care Quality Alliance (AQA), the Hospital Quality Alliance (HQA) and the Pharmacy Quality Alliance (PQA), a similar public-private collaboration is needed to address quality challenges in long term care settings,” Ignagni said.

Her other suggestions for a federal LTC agenda include an above-the-line federal income tax deduction for LTC insurance premiums; offering LTC insurance under cafeteria/FSA options; removing barriers to Medicaid managed care; exploring best practices and demonstrations; creating a presidential commission to address the nation’s LTC needs; and establishing a federal office to address LTC work force issues.

In his testimony, Jenner lobbied for Congress to include in legislation that a House-Senate conference committee is considering a provision that would permit the combination of an annuity and LTC insurance in one policy. The provision is included in the House version of the pending pension bill.

“This proposal would create more flexibility and choices for American consumers,” he said. “During working years individuals could accumulate assets in an annuity; at retirement, depending on the needs of individuals, that annuity could be used to provide lifetime income.

“A long term care insurance benefit within the annuity would pay for long-term services,” he said.

Jenner also noted that while stand-alone LTC insurance is key for many individuals, others may be deterred due to the absence of a savings accumulation feature within the product.

Permitting LTC coverage to be combined with the savings and asset management available in an annuity, as well as the death protection in a life insurance policy, “enhances the ability of Americans to structure their long term care planning to suit their retirement and estate planning needs.”


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