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More States Have LTC Partnerships But Reciprocity Remains An Issue

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As more state long term care partnerships are put in place, state legislators and insurance departments will need to have a stronger understanding of these programs and of how uniformity will help facilitate reciprocity among different state programs, a panel of long term care experts agreed.

The panel advised legislators during the spring meeting of the National Conference of Insurance Legislators, based in Troy, N.Y. Speakers emphasized the need for making these partnership programs work.

“The good news is that there is phenomenal traction on this,” noted Sandy Praeger, Kansas insurance commissioner and president of the National Association of Insurance Commissioners, Kansas City, Mo.

Indeed, according to statistics provided by the U.S. Department of Health and Human Services, Washington, there are 12 operational states including the original 4–California, Connecticut, Indiana and New York–to implement programs. The other 8 are Florida, Idaho, Kansas, Minnesota, South Dakota, Nebraska, Ohio and Virginia. Ten states are planning to implement these programs, including Iowa, Colorado, Georgia, Missouri, North Dakota, New Jersey, Nevada, Oklahoma, Oregon and Pennsylvania. Five states–Arizona, Michigan, New Hampshire, Texas and Wisconsin–have plan amendments pending. Additionally, 8 states have development activity underway: Illinois, Kentucky, Massachusetts, Maryland, Maine, Montana, Tennessee and Vermont.

Praeger offered some statistics to underscore the importance of LTC and of these Partnership programs:

–One in three Medicaid dollars goes toward paying LTC expenses.

–In 2004, $193 billion was spent on LTC services and nearly half was paid by Medicaid.

–Only $14 billion or 7% of LTC expenses is provided through LTC contracts.

These Partnership programs are important because they will free up assets for those who really need them, said Praeger. The costs currently being paid out by Medicaid are “not sustainable,” she added.

“Baby boomers are set to run through their IRAs or 401(k) funds,” said Hunter McKay, social science analyst with the Office of the Assistant Secretary for Planning and Evaluation of the U.S. Department of Health and Human Services, Washington. In the future, “it may be a very different picture. I’m not sure that folks will ever have the funds they have now,” he added. But major health events, McKay continued, “can knock one out of a comfortable retirement and make them a Medicaid client.” Still, he said, “the market we are after is trying not to hear us.”

“To date, a number of states are very concerned, but this is not going to work unless we have reciprocity,” he said. “People won’t buy it. How do we make sure that eligibility issues in the states will make this happen?”

Another problem he raised is the different Medicaid requirements among states and how much training agents actually need. “How far down the road do you actually take them?” he asked.

“Long term care partnerships are not a panacea, but may be part of the solution,” said Bonnie Burns, a representative with California Health Advocates, Scotts Valley, Calif.

A major difficulty, however, is that “no states do anything alike,” she said. “Partnership products are very different from state to state.”

What is needed, Burns continued, are “strong state standards and standardized Medicaid disclosures.”

Other points that states need to consider, she added, include:

–State-approved curricula and compliance procedures.

–A firm understanding of Medicaid benefits and how they work.

–A minimum number of required hours and courses for providers.

–Monitoring of cross-selling efforts by agents.

–An awareness of claims handling and denied claims as well as rescissions, termination of contracts with return of premium.

–The creation of uniform definitions among states.

State Rep. George Keiser, R-Bismarck, N.D., noted, “Wait until you move to another state. Where in the world will the oversight be?”

During the presentation, it was noted that the state in which the Partnership LTC contract was purchased would retain authority over insurance regulation and determine reciprocity rules with other Partnership programs. The state to which a contract holder moves determines Medicaid requirements when the contract holder is ready to participate in that program.


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