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Life Health > Long-Term Care Planning

Policy group: Restructure private LTCI

By Allison Bell

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Revamping and strengthening the private long-term care insurance (LTCI) market might be one way to improve the U.S. long-term care (LTC) finance system, according to analysts at the Bipartisan Policy Center.

The analysts have released a white paper that talks generally about the challenges the U.S. “long-term services and supports” (LTSS) system faces.

The analysts are planning to a release a more detailed paper, complete with budget impact analyses, later this year.

Former Senate majority leaders Tom Daschle, D-S.D., and Bill Frist, R-Tenn., started the center together with Alice Rivlin, a former Congressional Budget Office director, and Tommy Thompson, a former U.S. Health and Human Services secretary.

In the white paper, center analysts looked at options for revamping Medicaid LTC benefits and independent saving efforts as well as the private LTCI market.

Authors of some earlier LTC system reform reports have mentioned private LTCI only in passing.

The authors of the new report are critical of current LTCI products.

“No one would argue that the private long-term care insurance market, as currently structured, is a viable solution to address the needs of the diverse population in need of [long-term care services and supports (LTSS)],” the center analysts write.

The analysts acknowledge that LTCI issuers face challenges from the current low-interest-rate environment, but they say the insurers also face problems with developing a viable risk pool in a voluntary market in which only people who believe they are at a high risk of needing LTC services buy private insurance.

The current voluntary system leads to a combination of high premium costs and tough medical underwriting by the insurers, the analysts write.

Requiring individuals to buy private LTCI and requiring issuers to sell the product on a guaranteed-issue basis could help, but that strategy would appear to have little support among policymakers, the analysts write.

The analysts suggest policymakers should be looking for other ways to reform the LTCI market, and looking at topics such as the proper role of private LTCI, product design standardization, LTCI product distribution, and voluntary, auto-enroll group LTCI programs with opt-out provisions.

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