State long term care insurance partnership programs are unlikely to result in savings for Medicaid and may even increase state Medicaid spending slightly, according to officials at the Government Accountability Office.
A GAO survey of the 4 states with existing LTC Partnership programs — California, Connecticut, Indiana and New York — found that about 80% of current partnership policyholders would have bought traditional LTC insurance if partnership policies did not exist. The remaining 20% said they would have paid for their own care if there was no partnership program, John Dicken, a GAO director, writes in the GAO LTC Partnership program report.
Originally, federal law limited states’ ability to set up LTC Partnership programs.
The Deficit Reduction Act of 2006 lifted the restrictions, and at least 25 states are now in the process of developing partnership programs.
Idaho recently received approval for its program from the Centers for Medicare & Medicaid Services.
In states that have LTC Partnership programs, individuals who buy the qualifying policies and exhaust private benefits can keep some of their assets even if they end up using Medicaid nursing home benefits.
For the GAO study, GAO analysts used 2002-2005 data from the 4 original partnership program states.
During the period, partnership policyholders bought more extensive coverage than traditional LTC insurance policyholders, Dicken writes.