A think tank that tries to bring moderate Democrats and moderate Republicans together says policymakers should consider trying to reboot the private long-term care insurance (LTCI) market.
Policymakers could create a more functional, more sustainable private LTCI market by encouraging the sale of a new type of limited-benefit retirement LTCI product, according to the staff of the Bipartisan Policy Center (BPC).
In a new report, the BPC staff is recommending that policymakers:
Let workers use cash from 401(k) plan accounts or other retirement accounts to pay the premiums for the retirement LTCI policies.
Hold down costs by letting the retirement LTCI policies cover just two to four years of LTCI services.
Let issuers further limit costs by building cash deductibles or waiting periods into the benefits eligibility requirements.
Use tax incentives to encourage employers to enroll retirement plan members in retirement LTCI coverage on an automatic basis, and to require the plan members to take active steps to opt out of the LTCI coverage.
Let the Patient Protection and Affordable Care Act (PPACA) public exchange system sell retirement LTCI coverage.
Howard Baker and Bob Dole, two former Republican Senate majority leaders, and Tom Daschle and George Mitchell, two former Democratic Senate majority leaders, set up the BPC in 2007 in an effort to come up with “principled solutions through rigorous analysis, reasoned negotiation, and respectful dialogue.”
The center, which called for bipartisan efforts to restructure the private LTCI market in a report issued in 2014, says its staff created the new report with help from an advisory panel and a grant from The SCAN Foundation.
See also: Policy group: Restructure private LTCI
Projections from the Urban Institute show that, if the current LTCI policy framework stays in effect, the percentage of U.S. residents who turn 65 from 2041 through 2045 and have private LTCI may be as low as 9 percent, according to the BPC staff.
Only 21 percent of U.S. residents who participated in a 2015 survey said they had done much long-term care (LTC) planning, and only one-third had set aside money for future LTC needs, the staff says.
The BPC staff says middle-income Americans should have access to a sustainable private LTCI market.
In addition to calling for a reboot of the private LTCI market, the BPC staff is recommending expansion of efforts to allow Medicaid to pay for home and community-based services; creation of LTC benefits Medicaid buy-in programs for workers who already have serious disabilities; the start of efforts to create a public catastrophic LTCI program for people with LTC expenses over $250,000; exploration of the idea of adding an LTC services benefit to Medicare supplement and Medicare Advantage plans; and development of a tax credit for family caregivers.
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