Medicare actuaries strangled the Community Living Assistance and Support Services (CLASS) public long-term care (LTC) finance program just two years ago, but some health policy makers say Congress is going to have to come up with some other kind of new public LTC program sooner or later.
Sen. Bill Nelson, D-Fla., chairman of the Senate Special Committee on Aging, opened an LTC policy hearing Wednesday by citing Congressional Budget Office estimates that LTC expenditures will eat up 3.3 percent of U.S. gross domestic product (GDP) in 2050, up from 1.3 percent of GDP today.
Judy Feder, a professor at Georgetown University, testified that a public insurance program has to be at the heart of any serious national LTC finance effort.
Even advocates of private LTCI programs generally concede that those programs can cover only about 20 percent of the people who need coverage, Feder said.
Anne Tumlinson, a budget analyst at Avalere Health, said she looked into the issue and was surprised to find herself agreeing that setting up a mandatory, public LTCI program might be the only way to bring in enough revenue to cover the cost of LTC needs without triggering adverse selection and death spirals.
In the real world, Tumlinson said, there’s no way most ordinary people can afford to use private LTCI to prepare for LTC needs.
“I don’t even have long-term care insurance, and I know a lot about it,” Tumlinson said.
Mark Warshawsky, an analyst affiliated with the American Enterprise Institute, agreed that public programs will have to play a role in paying for long-term care.
But he said Congress could help expand use of private LTCI dramatically by helping Americans use the cash in retirement accounts to pay for LTCI, and by promoting the sale of life care annuities.