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Life Health > Long-Term Care Planning

Panelists Ice Out LTCI Talk

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Howard Gleckman, the moderator of a recent Urban Institute panel discussion on “long-term care in an era of shrinking government,” greeted an audience question about private long-term care insurance (LTCI) with a polite but distant stare.

The Urban Institute, Washington, organized the discussion in response to U.S. Health and Human Services Secretary Kathleen Sebelius’s announcement in October that she saw no way to create a viable voluntary worksite LTC benefits program based on the Community Living Assistance and Support Services (CLASS) Act.

The Urban Institute panelists did not seem to think the current Congress would do much about meeting U.S. residents’ LTC needs, in part because of the difficulty of dealing with anti-selection concerns.

“It does seem very difficult to do this on a voluntary basis, and it also seems very unlikely that we’re going to make this mandatory,” said Len Fishman, chief executive officer of Senior Hebrew Life, Boston.

Fishman said one ray of hope is that Medicare will be making hospitals with excessive readmission rates pay penalties starting in 2012. The penalty is having a “stunning” effect on hospitals’ level of interest in what happens to patients after patients leave the hospital, he said.

Later, Fishman suggested that Congress will have to get the money for LTC by shifting resources away from the Medicare acute care budget.

“Increasing spending for long-term care at all is going to be really hard while acute care is driving us toward an unsustainable growth curve,” Fishman said.

Joshua Wiener, director of the program on aging, disability and long-term care at RTI International, Research Triangle Park, N.C., said in response to a question about the possibility of Medicaid getting out of the LTC benefits business that Medicaid has to be in the LTC business.

“Who else is going to be in that business?” Wiener asked.

At the end of the discussion, an audience member who said she was a staff member from the Senate Special Committee on Aging focused participants’ attention on private LTCI by asking whether advances in the genetic tests used in LTCI underwriting could help make LTCI more viable.

The audience member also asked for support for S. 159, the Confidence in Long-Term Care Insurance Act bill. The bill, which is supported both by Consumers Union, Yonkers, N.Y., and America’s Health Insurance Plans, Washington, would make state insurance regulators’ LTCI standards federal law.

Gleckman simply stared at the woman and waited for her to finish.

A panelist, Robyn Stone, senior vice president for research at LeadingAge, Washington, a consortium of nonprofit groups with an interest in aging, dismissed the idea of private LTCI playing a significant role in LTC finance.

“I actually think it’s going to get much worse than it is now,” Stone said. “The younger people are in really bad situations. They’re not going to make tradeoffs that would allow buying a long-term care insurance product. So, if anything, I think the market’s going to go down, and it’s been a sort of marginal market to begin with.”

Not long after the panel discussion, these concerns became more than hypothetical. On November 15, members of the health subcommittee at the House Energy and Commerce Committee passed H.R. 1173, the Fiscal Responsibility and Retirement Security Bill. H.R. 1173 formally repealed the CLASS provisions of the Patient Protection and Affordable Care Act. The vote was not surprising, especially given Sebelius’ October announcement that the program could not be paid for.

Rep. Frank Pallone, D-N.J., Pallone noted that program designers had tried to make the program self-sustaining, so that participants would be taking personal responsibility for the benefits and not depending on government handouts. Despite this effort, CLASS was seen as too unsound actuarially to ever implement.


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