Bipartisan group urges a universal program for this insurance line

The growing number of aging Americans has caused members of the Brookings Institution and AHIP to propose a new plan

Insurance News

By Lyle Adriano

The Long Term Care Financing Collaborative (LTCFC) announced Feb. 22 that America needs a universal catastrophic insurance program, such as Medicare, in order to address the country’s growing long-term care costs. The bipartisan policy group published a new report that shared its findings and recommendations for the nation’s health insurance industry.

Composed of former state Medicaid directors, members of the Brookings Institution, and associates of the trade group America’s Health Insurance Plans (AHIP), the LTCFC is the third policy group in recent memory to recommend universal long-term care insurance.

"The only thing that's left is a universal program," said Urban Institute senior fellow and LTCFC founder Howard Gleckman. "It's not possible to create a realistic model for a voluntary program."

Gleckman noted that voluntary programs have led to an “adverse selection” of health plans on the ACA exchanges with highly imbalanced costs. He reasoned that without healthier people balancing out the sickly and in need of medical care, the premiums become too expensive for most.

The LTCFC’s report also recommends major changes to Medicaid to protect those with limited lifetime incomes and those who deplete their assets paying for medical bills and long-term care.

Roughly 30% of Medicaid funding covers long-term care, which is about $100 billion annual. There have been considerations among Republican lawmakers to amend the Medicaid system to strip disabled younger individuals of their benefits when they earn more than about $800 a month.

Gleckman called the proposal a “terrible arrangement,” and its implementation would give many an "enormous disincentive to work."

In early February, the Bipartisan Policy Center delivered its recommendations for less sweeping changes to preempt long-term care cost concerns. The recommendations include directly linking long-term care insurance to retirement benefits, providing limited long-term care benefits through Medigap and Medicare Advantage, Medicare respite benefits for unpaid caregivers, and tax credits for paid long-term care services.

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