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Life Health > Long-Term Care Planning

LTCI: Medicare's best friend?

By Allison Bell

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Members of the private long-term care insurance (LTCI) community are used to getting about one condescending pat on the back from federal Medicare program managers for about every nine hits with a cold governmental shoulder.

In recent years, when the Centers for Medicare & Medicaid Services (CMS) and its kin have organized panel discussions on the future of long-term care (LTC) services, most of the participants who have mentioned private LTCI at all have implied that it’s a somewhat embarrassing niche product.

Even when, for example, the panelists talk about trying to organize some kind of government effort to publicize the idea that consumers ought to think about the possibility of having to pay for LTC services, one way or another, they never seem to remember to mention that the 3in4 Association spent a fortune to send Dr. Marion Somers around the country in a Greyhound bus a couple of years ago to do just that.

Now Dr. Stephen Holland, chief medical officer at Univita Health Inc., has come up with a paper that explains why the Medicare managers might want to put a heating pad on that shoulder and warm up to LTCI: LTC benefits may help slash the high cost of treating patients in their last year of life while improving the quality of care.

Holland presented a paper supporting the concept of offering acute health care benefits together with LTC benefits at the recent Intercompany Long Term Care Insurance Conference in Orlando, Fla.

Holland and colleagues used data from the California Public Employees’ Retirement System (CalPERS), which offers both retiree health plans and a large LTC benefits plan, and found that having formal LTC benefits had a huge, obvious effect on end-of-life care and the cost of that care.

medical bill

Holland and colleagues compared data for 830 CalPERS health plan decedents ages 65 and older who had paid for LTC benefits and 1,131 matched controls who had not.

The subjects with LTC benefits were similar to the subjects in the control group. They were about the same age, slightly more likely to be male, and slightly more likely to suffer from frailty, dementia or depression, according to a written version of the Holland presentation posted on the ILTCI site.

The subjects who had LTC benefits were 16 percent more likely to use skilled nursing facility care in their last year of life than other CalPERS patients getting end-of-life care.

But pharmacy costs for the subjects who had LTC benefits were 13 percent lower, the cost of their outpatient care was 16 percent lower, their number of inpatient admissions was 16 percent lower, and their average total medical cost was 14 percent lower.

For patients with dementia, the main effect of having LTC benefits was to cut the likelihood that they would spend time in a hospital.

For patients without dementia, the effects were more dramatic.

“Those without dementia [had] significantly lower overall total medical costs, lower total pharmacy costs, lower inpatient admissions and inpatient costs, lower outpatient costs, and lower skilled nursing facility admissions and days of care,” Holland found. 

man getting emergency care

Holland acknowledged that the study has limitations.

He was unable to measure how much members of either the LTC benefits group or a match control group paid for care out of care, or how much “free” care members of either group got from friends and relatives.

But the results support the idea that offering access to paid, formal LTC services may be a good way to reduce the use and cost of end-of-life medical care, Holland said.

For agents, brokers and others who are trying to get Medicare Advantage plan producers, Medicare Advantage carrier executives and traditional Medicare program officials to promote LTC planning, the study results suggest the following arguments:

  • LTC benefits may help dying health plan members stay out of the hospital;
  • LTC benefits may reduce the amount those dying health plan members spend on prescription drugs; and
  • LTC benefits may help reduce total medical costs for dying health plan members without hurting the quality of care they get.

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