Group Long-Term Care Insurance: Decision-Making Factors and Implications for Financing Long-Term Care

This study proposes and tests a systemic family decisionmaking framework to understand group long-term care insurance (LTCI) enrollment decisions. A random sample of public employees who were offered group LTCI as a workplace benefit were examined. Findings reveal very good predictive efficacy for the overall conceptual framework with a pseudo R² value of .687, and reinforced the contributions of factors within the family system. Enrollees were more likely to have discussed the decision with others, used information sources, and had prior experience when compared to non-enrollees. Perceived health status, financial knowledge, attitudes regarding the role of private insurance, risk taking, and coverage features were additional factors related to enrollment decisions. The findings help to inform policymakers about the potential of LTCI as one strategy for financing long-term care.     

Assuring the quality of long-term care insurance benefits through care management: the California partnership for long-term care

Despite recent improvements in long-term care insurance (LTCI) policies, concerns have been raised regarding just how well LTCI benefits actually meet elderly consumers' health and financial needs. In this case study, we examined the quality assurance (QA) provisions in a state-sponsored LTCI program, the California Partnership for Long-Term Care (CPLTC). CPLTC invests the primary responsibility for QA with care management networks, which assure quality services through care monitoring, quarterly service record reviews, and annual documentation of care manager clinical competence. Study findings suggest a number of limitations in existing QA policies and procedures, which can undermine the ability of care managers and other third parties to identify and rectify potential unmet needs among LTCI policyholders. These findings, while based on an intensive analysis of QA provisions in a particular, state-sponsored LTCI program, are likely to have implications for other LTCI programs and policies, most of which have less well-developed QA provisions.     

Factors Impacting Group Long-Term Care Insurance Enrollment Decisions

This paper examines factors that influence whether or not employees choose to enroll in a group long-term care insurance plan. A conceptual family decision-making framework is used to group factors to study the enrollment decision of 509 state employees who were offered a long-term care insurance plan in 2000. Logistic regression results revealed that employee age, perceived risk, perceived affordability, decision-making style (communication with others and use of information), goals of control and choice, goal of financial peace of mind, household income, and potential caregiver availability explained 68.7% of the decision to enroll. Results support the key role of perception, specifically the perceived risk of needing long-term care and the affordability of the insurance plan, in the decision outcome.     

Differences in facilities' acceptance of patients under long-term care insurance in Japan

OBJECTIVES: In April 2000, Japan launched a public, long-term care insurance (LTCI) plan for elderly people who need support. This study describes how medical support for the elderly is delivered at LTCI care facilities in Japan now and gaps between system goals and current activity. Recommendations are made for enhancing the implementation of LTCI. METHODS: We mailed questionnaires to all health service facilities for the elderly (HSF) and special nursing homes for the elderly (SNH) located in the Kyushu area of Japan, asking whether they would accept patients with nine specific conditions. RESULTS: We found that HSFs, which are required to employ a full-time doctor and are reimbursed at a higher rate, accept significantly fewer patients with four conditions that need medical support than are accepted by SNHs, which are not required to employ a full-time doctor. DISCUSSION: In this study, we find discrepancies between system goals and current activities at LTCI care facilities. For the Japanese LTCI system to work well in the limitation of medical resources, we must understand how it really works and to reform the system continuously.     

Future of long-term care financing for the elderly in Korea

With rapid aging, change in family structure, and the increase in the labor participation of women, the demand for long-term care has been increasing in Korea. Inappropriate utilization of medical care by the elderly in health care institutions, such as social admissions, also puts a financial burden on the health insurance system. The widening gap between the need for long-term care and the capacity of welfare programs to fulfill that need, along with a rather new national pension scheme and the limited economic capacity of the elderly, calls for a new public financing mechanism to provide protection for a broader range of old people from the costs of long-term care. Many important decisions are yet to be made, although Korea is likely to introduce social insurance for long-term care rather than tax-based financing, following the tradition of social health insurance. Whether it should cover only the elderly longterm care or all types of long-term care including disability of all age groups will have a critical impact on social solidarity and the financial sustainability of the new long-term care insurance. Generosity of benefits or the level of out-of-pocket payment, the role of cash benefits, and the relation with health insurance scheme all should be taken into account in the design of a new financing scheme. Lack of care personnel and facilities is also a barrier to the implementation of public long-term care financing in Korea, and the implementation strategy needs to be carved out carefully.     

Israel's long-term care insurance law after a decade of implementation

Israel's Long-Term Care Insurance (LTCI) law has been in effect for a decade. It is timely to review the effects of this legislation with a view to identifying possible directions for reform and lessons for other countries considering the introduction of a similar social insurance scheme. The paper considers the law's effects in terms of the size and characteristics of the beneficiary population, the coverage of the scheme, its financial standing, the rate of institutionalization of the elderly, the caregiving burden, the service delivery system, and the overall scope of long-term care services for the aged. Israel's experience has lessons for financing arrangements, target efficiency, service delivery arrangements, and the construction of the burden of care.     

Voluntary long-term care insurance: best practices for increasing employee participation

This is the second of two Issue Briefs (April and May 2000) on long-term care (LTC) insurance. The previous Issue Brief addressed the problem of increasing sponsorship, while this report addresses the issue of increasing employee participation. Participation rates in group LTC insurance plans tend to be low. A potential watershed event for the development of the employment-based group LTC market is the proposed LTC program for federal employees and retirees (a program that would have to be enacted by Congress). The perception of a successful offering to federal employees could provide an enormous boost to the group LTC insurance market. Employee communication and education are seen as critical to the success of LTC enrollments. The importance of support shown by an employer for a new LTC plan offering cannot be overstated. Unlike 401(k) plan participation trends, LTC participation rates are highest among large companies. Insurers tend to view the 40-60 age range as the primary target for group LTC insurance, and employee salary as the best predictor of LTC insurance enrollment. Higher educational levels also are associated with higher levels of LTC participation. Perceived need for LTC insurance is perhaps the biggest barrier to the purchase of LTC insurance by employees due to competing financial priorities and the fact that LTC issues are generally off the "radar screens" of younger employees. Plans with skilled nursing home and home care benefits experience higher participation rates than plans lacking these benefits. The availability of lower-cost and long duration benefit options can be an important factor in determining participation. Most sponsors have chosen to offer noncontributory (i.e., fully employee-paid) LTC plans. Employer reluctance to make contributions may be caused by HIPAA's prohibition on the inclusion of LTC insurance in cafeteria plans. One of the major advantages of group LTC plans is the availability of guaranteed issue (i.e., issuing coverage without requiring evidence of insurability) for employees, which is not available in the individual LTC market. It is easy for enrollment to be derailed by the presence of any of a number of harmful conditions, such as employer-sponsors who distance themselves from the offer, ineffective communications, or difficult enrollment processes. Achieving consistently strong levels of participation in LTC plans will require employer-sponsors and their insurance carriers to form strong partnerships, with worker participation as their primary stated goal.     

Long-term care and the private insurance market

Increased life expectancy and the aging of the baby boom generation will bring rapid growth in the number of people at risk of needing long-term care (LTC). This Issue Brief provides an overview of the current LTC financing and delivery system in the United States, focusing on private-sector initiatives to meet the United States' LTC needs. It discusses private-sector plan design--particularly employment-based plan design--providing an in-depth look at the dramatic changes taking place in the private-sector LTC market since its inception in the early and mid 1980s. Aside from informal care provided in the community, the current system of financing LTC depends largely on the Medicaid program and individual financing. Issues confronting this system include spiraling costs associated with LTC services that may threaten beneficiaries' access to care. Other issues include the potential depletion of personal assets and a bias toward institutionalization (which may not always provide the most cost-effective or desired type of care available). Many leaders regard private long-term care insurance (LTCI) as a way to increase access to financing and as a potential alternative to Medicaid and out-of-pocket financing. By the end of 1993, a total of 3.4 million private-sector LTCI policies had been sold, up from approximately 815,000 in 1987. While the majority of these plans were sold to individuals or through group associations, employment-based plans accounted for a significant proportion of this growth. Premiums for LTCI vary substantially based on age and plan design. Insurers generally attempt to set premiums such that they will remain level over the insured's lifetime. However, because little LTC claims insurance experience yet exists, the actuarial basis for developing premiums and statutory reserves is limited. Several bills over the last three Congresses have been introduced to address the issue of LTC. However, due to cost implications and lack of consensus regarding the optimum overall structure required to finance and deliver care, broad legislation to expand coverage--particularly public coverage--is not likely in the near term.     

The importance of employer sponsorship in the long-term care insurance market

Medicare and Medicaid are major sources of long-term care payments and thus will bear much of the burden from the growth in long-term care service use. The large future demand for long-term care services is of great concern among policymakers due to its expense and the use of public program dollars. It is argued that the individual purchase of long-term care insurance can help alleviate the increasing financial pressure on public programs responsible for the majority of longterm care financing. However, consumers have shown little interest in insuring against the high costs of long-term care. This analysis examines the effect of several factors on the decision to purchase a long-term care insurance policy: knowledge and attitudes of long-term care insurance and the long-term care financing system, the perceived risk for longterm care, financial planning behavior, and the availability of long-term care insurance. The interim results indicate the factor most likely to affect the decision to purchase long-term care insurance is access to employer-sponsored long-term care insurance. This suggests tht the availability of affordable and high quality coverage is more important than demand-side factors such as awareness of long-term care insurance and a perceived greater risk for long-term care.     

Health insurance for all long-term care workers: estimated costs and coverage impacts in Minnesota and recommendations for States

A major barrier to building a strong workforce to meet the growing need for long-care is lack of affordable health benefits. This study projects impacts of funding health coverage for all long-term care workers in Minnesota. Under the most cost effective model plan design, enrollment in employer-sponsored coverage would increase 73% to 100% for individual coverage and 26% to 42% for family coverage. Total monthly costs would be $698/worker in the commercial market or $634/worker through a new dedicated risk pool. Based on our findings and past research, the authors present recommendations for structuring and implementing a long-term care worker health insurance initiative.     

Financing reform for long-term care: strategies for public and private long-term care insurance

The way the nation provides for the financing and delivery of long-term care is badly in need of reform. The principal options for change are private insurance, altering Medicaid, and public long-term care insurance. This article uses the Brookings-ICF Long-Term Care Financing Model to evaluate each of these options in terms of affordability, distribution of benefits, and ability to reduce catastrophic out-of-pocket costs. So long as private insurance is aimed at the elderly, its market penetration and ability to finance long-term care will remain severely limited. Affordability is a major problem. Selling to younger persons could solve the affordability problem, but marketing is extremely difficult. Liberalizing Medicaid could help solve the problems of long-term care, but there is little public support for means-tested programs. Finally, universalistic public insurance programs do well in meeting the goals of long-term care reform, but all social insurance programs are expensive and seem politically infeasible in the current political environment.     

Financing Long-Term Care: Examining Decision Outcomes and Systemic Influences from the Perspective of Family Members

This study examined financing long-term care from a micro-level family perspective. Qualitative analysis of interviews conducted with 45 families coping with paying for an elder's long-term care provided insight into what decisions were made as well as what factors influenced those decisions. Family members articulate systemic factors within and outside of the family system influencing three decision making outcomes: (a) using and preserving private resources, (b) Medicaid estate planning and (c) deciding not to decide. Case examples and a discussion of the emerging framework provide insight for researchers working to inform long-term care issues and for educational focused practitioners.     

Enabling informed consumer choice in the long-term care insurance market.

Provisions in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) may increase private long-term care insurance sales without imposing substantially more stringent consumer-protection features. The ability of consumers to make informed choices when purchasing this complex product is examined in light of these changes. Data were collected through detailed examinations of policies and interviews with industry experts, insurance companies, agents, consumer groups, and regulators. Because of the complexity of this product, the goals of expanding, consumer choice and ensuring that consumers are able to make informed decisions often work against each other. Mechanisms are discussed through which the government can facilitate informed choice and improve consumer protection. The authors contend that, because the government is providing tax incentives that encourage consumers to purchase the product, it has the responsibility to ensure that consumers understand the long-term care insurance they purchase.     

Factors Related to the Institutionalization of Older Aged Individuals Using Home- and Community-Based Care Services: Data From the South Korea Long-Term Care Insurance Program, 2008–2013

South Korea introduced a public long-term care insurance (LTCI) program in response to its rapidly aging population. This study analyzed the association between living arrangement and caregiver type with institutionalization in LTCI grade 1 (very severe limitations), 2 (severe limitations), and 3 (moderate limitations) beneficiaries using data from the LTCI cohort, 2008 to 2013. The dependent variable was alteration status from home to institutional care within 1 year of receiving home service. Independent variables were living arrangement and primary caregiver type. The analysis was conducted using the generalized estimating equation model. Higher likelihoods of institutionalization were found in individuals living with a non-family member compared to individuals living with their spouses. Individuals without a caregiver or with a paid caregiver were also more likely to experience institutionalization than individuals with a spouse primary caregiver. Our findings underscore the importance of monitoring identified vulnerable groups of individuals to attain LTCI sustainability and enhance elderly quality of life.     

The role of life experience in long-term care insurance decisions

This study uses data from a unique survey of the retirement planning behaviors of late middle-aged individuals living in New York State, to test hypotheses regarding the role of earlier life experiences on the demand for long-term care insurance. Our primary focus is on previous provision of informal long-term care, which some studies have found to be correlated with demand for long-term care insurance. We add to the literature by providing a test for causal relationships between previous care-giving and insurance demand, and by exploring the more generally the mechanisms through which previous life experiences are linked to insurance demand. Results are robust to a variety of empirical specifications and estimation methods, including consideration of current care-giving roles and endogenous selection into previous care-giving, and strongly support a causal relationship between previous long-term care-giving and demand for insurance. Our estimates also provide evidence that lifetime health trajectories and family relationships are associated with long-term care insurance demand, and suggest that both emotional and informational forces influence demand.     

Convergence of long-term care planning and retirement planning at the work place

There is an increasing expectation that the private-sector should provide needed solutions to pressing problems in long-term care. Long-term care insurance has figured prominently in recent discussions. Within the long-term care insurance market, the potential of the employer in making such insurance available to employees has been discussed extensively. This paper traces the increasing convergence of retirement planning and long-term care planning at the work place. The long-term care insurance market has come a long way, and the employer-sponsored segment of the market has recorded the highest rate of growth in recent times. Furthermore, the employer-sponsored market is beginning to diversify. Low take-up rates still remain a problem. Recent rapid growth of the market coupled with the federal government's involvement as an employer offering long-term care insurance is bound to expand the market further.     

The savings approach to financing long-term care in Singapore

Singapore is grappling with provision of services for the current generation of older people at the same time as building the foundation for the coming generations of elderly. In this article, I analyze four sets of factors that are shaping long-term care policy and financing in ways that are almost unique to Singapore. First, current developments can only be understood in the context of the Central Provident Fund (CPF) that was established by the Government of Singapore in the 1950s to ensure that the working population saved for retirement; the Medisave and related schemes for financing health care were subsequently developed alongside the CPF. Most recently, the existing funding arrangements have been extended to some long-term care services, and options for further extensions are under consideration. Second, the government's philosophy of maintaining the primacy of family support for the elderly has been expressed through a number of initiatives that provide financial and other incentives to families, combined with an emphasis on community care. The third factor is the relationship between government and the voluntary welfare organizations that are the major providers of institutional and community services. Finally, a series of government-sponsored reviews and advisory councils have provided for widespread consultation on policy options. These developments are directed to achieving a multi-pillar approach in which intergenerational transfers through taxation will be limited, and the role of individual savings and insurance will be increased.     

A multidimensional and contextual framework for understanding diverse family members' roles in long-term care facilities

Very few studies have explicitly examined the roles of family members in institutionalized settings and how these roles are developed. The most widely used theoretical framework employed in the studies that do exist is Litwak's structural-functionalist framework—the theory of shared functions and balanced coordination. Although Litwak's theory emphasizes the importance of both formal organizations (e.g., long-term care facilities) and primary groups (e.g., family) to optimal care, the framework provides a limited understanding of the roles of family members in long-term care facilities. The first section of this article describes Litwak's framework and then outlines the limitations of this task-assignment approach. By adopting a symbolic interactionist approach and integrating concepts from an ecological perspective and Hughes' concept of career, an alternative, more dynamic, contextual framework for understanding the roles of family members in long-term care settings is presented.     

Partnership long-term care insurance: lessons for CLASS program development

The Community Living Assistance Services and Supports (CLASS) Act was a voluntary public insurance strategy intended to help people pay for long-term care. CLASS was passed as part of health reform to overcome aspects of private long-term care insurance market failure but came under close scrutiny from both its supporters and its detractors. Experience with the long-term care insurance market and State Partnership Programs provide insights about how to make CLASS fiscally viable. A CLASS program that offered one set of options to cover front-end risk (e.g., 1 to 3 years) and another set to cover catastrophic risk (after a high deductible) could have been offered as an alternative to the basic CLASS "long and lean" benefit model with all enrollees joined into a single risk pool. This would have broadened the risk pool and lowered premium costs under the program.     

Changing Relationships Between Nonprofit and For-profit Human Service Organizations Under the Long-Term Care System in Japan

In Japan, a nonprofit organization system enacted in the late 1990s and the later introduction of privatization policies in human services were expected to overturn government dominance of nonprofit organization activities. By focusing on the long-term care insurance (LTCI) system, which privatized public human services for the first time in the country, this study empirically examines whether, and to what extent, nonprofit–government relationships in Japan have actually changed as a result of this new system. In addition, because LTCI newly allows for-profit organizations to provide services, the influence of such organizations were incorporated into the analysis. The outcomes of this study demonstrate that the government continues to extend its sphere of influence over nonprofit and for-profit organizations through LTCI. In addition, for-profit organizations appear to be more successful than nonprofit organizations, in that the former organizations have overcome their lack of experience as public service providers by taking over the roles that nonprofit organizations have traditionally occupied.