House panel considers public catastrophic LTCI proposal

Creating a new, government-run catastrophic long-term care insurance (LTCI) is one long-term care (LTC) finance proposal that came up today at a House hearing on LTC finance reform.

Witnesses also talked about the possibility of letting workers use some of the cash in their 401(k) to pay private LTCI premiums.

The House Energy & Commerce health subcommittee organized the hearing to look at a wide range of ideas for shoring up the country’s public and private LTC finance systems.

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Rep. Joseph Pitts, R-Pa., the subcommittee chair, said in his opening remarks that his colleagues are rightly skeptical of any proposals that might create anything that looks like a new LTC entitlement program.

Medicare alone has about $35 trillion in unfunded obligations, Pitts said. But “caution against new entitlements doesn’t equal closed-mindedness to new approaches,” Pitts said.

Subcommittee members from both parties talked about personal reasons for having an interest in LTC finance.

Rep. Michael Burgess, R-Texas, a medical doctor, recalled that his mother acted as a caregiver for his father, who was disabled. Back in 1989, he said, she told him to buy private LTCI by the time he was 50, before it became too expensive.

“There need to be safety net programs,” Burgess said. But “you need to be prepared for these things,” he added. “They can happen to you.”

Alice Rivlin, a former vice chair of the Federal Reserve board who has been working on the package of LTC finance proposals recently released by the Bipartisan Policy Center (BPC), stumped for the public catastrophic LTCI program proposal, the 401(k) plan LTCI premium proposal, and other proposals from the BPC package.

A public program that helped protect the small number of consumers who need LTC services for five years or more might help lure private LTCI issuers back into the market, Rivlin said.

Anne Tumlinson, a former LifePlans LTCI analyst and Office of Management and Budget (OMB) Medicaid analyst, warned that LTC finance is much more complicated than it looks.

“We often simply fail meet long-term care needs,” Tumlinson said.

In some cases, Tumlinson said, people who have unmet LTC needs and are unable to prepare meals go without eating.