High quality private long-term care insurance: can we get there from here?

The private long-term care insurance market has undergone rapid change in the last several years. Although the quality of policies has generally improved, problems remain. Consumer protection issues include the lack of adequate inflation protection features, how activities of daily living are measured, potentially high lapse rates and lack of nonforfeiture values, how home care benefits are defined, and the appropriate loss ratio standards. The concerns of consumer and elderly advocates about the quality of private long-term care insurance have prompted congress to consider the need for federal intervention. While there are numerous approaches that the federal government could take, mandatory standards substantially higher than the current model standards of the National Association of Insurance Commissioners may prove the most effective in improving the quality of policies on a nationwide basis.     

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.     

Enabling Informed Consumer Choice in the Long-Term Care Insurance Market

ABSTRACT

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.     

Families, work, and an aging population: developing a formula that works for the workers

This article examines the intersection of family caregiving, work, and long-term care. Supporting families who provide care in order to minimize negative work effects while enhancing the acceptability of care options is of common concern to employers, state and federal policymakers, and the homecare professionals in the community-based care system. The contribution of families to the long-term care system, how employer policies have developed, how the public policy agenda has addressed family caregiving, and the importance of a more effective partnership on the state level are discussed.     

Designing home care benefits: the range of options and experience

This article presents a framework identifying important home care benefit design decisions and reviews existing designs that have been adopted in practice. Four basic designs were identified, based on a review of 55 home care benefits drawn from public programs in the United States and foreign countries, and from private long-term care insurance policies in the United States. Three of these designs-service entitlements, managed-service benefits, and cash disability allowances--have each been adopted by public programs in the United States and abroad, and by private insurance policies in the United States. A fourth design--individualized cash benefits--has been adopted in only one experimental program. The designs observed in practice are remarkably varied, providing evidence that many alternative designs are feasible. Experimentation, particularly with cash disability allowances, is needed to determine the relative costs and benefits of various designs.     

Families,Work, and an Aging Population

Abstract

This article examines the intersection of family caregiving, work, and long-term care. Supporting families who provide care in order to minimize negative work effects while enhancing the acceptability of care options is of common concern to employers, state and federal policymakers, and the homecare professionals in the community-based care system. The contribution of families to the long-term care system, how employer policies have developed, how the public policy agenda has addressed family caregiving, and the importance of a more effective partnership on the state level are discussed.     

The Effect of Long-Term Care Insurance on Home Care Use Among the Disabled Elders

Using the 1998?C2004 Health and Retirement Study, this study uses Cox??s model to explore the effects of private long-term care insurance ownership on first home care use among the disabled elderly. Results show that long-term care insurance ownership and Medicaid eligibility did not significantly increase the likelihood of using home care services, while income and homeownership lowered this likelihood. Functional limitation was the key determinant of home care use and those who lived with children were less likely to use home care services. Based on the findings, this study provides foundations for long-term care policies and long-term care planning programs.     

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.     

Financing Reform for Long-Term Care

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 110 FROM NURSJNG HOMES TO HOME CARE public long-term care insurance. This article uses the Brookings-ICE 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 scverely 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 longterm care reform, but all social insurance programs are expensive and seem politically infeasible in the current political environment. The way the nation provides for the financing and delivery of long-term care is badly in need of reform. No other part of the health care system generates as much passionate discontent as does long-term care. At the heart of the problem is the absence of any satisfactory way to help people anticipate and pay for long-term care. The disabled elderly find, often to their surprise, that the costs of nursing home and home care are not covered to any significant extent by Medicare or private insurance. Instead, they must rely on their own savings or, failing that, turn to welfare in the form of Medicaid. At a national average cost of $40,000 a year for nursing home care, long-term care is a leading cause of catastrophic out-of-pocket health care costs for the elderly. In addition, despite the strong preferences of the disabled for home and community-based services, current financing is highly skewed toward care in nursing homes. While the debate over long-term care reform has many facets, it is primarily an argument over the relative merits of private- versus publicsector approaches. Differences over how much emphasis to put on each sector partly depend on values that cannot be directly proved or disproved. Some believe that the primary responsibility for care of the elderly belongs with individuals and their families, and that government should act only as a payer of last resort for those unable to provide for themselves. The opposite view is that the government should take the lead in ensuring comprehensive care for all disabled older people, regardless of financial need, by providing comprehensive, compulsory social insurance. In this view, there is little or no role for the private sector. Between these polar positions, many combinations of public and private responsibility are possible.     

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.     

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.     

Systems Development and Difficulties in Implementing Procedures for Elder Abuse Prevention Among Private Community General Support Centers in Japan

The present study examines differences in systems development and difficulties in implementing procedures for elder abuse prevention in 1,119 private and 606 public community general support centers under the public long-term care insurance program in Japan. The private community general support centers showed more difficulty implementing procedures than the public community general support centers. Controlling for the type of municipality, progress in systems development did not differ between the private and public community general support centers. Further research should examine how the characteristics of municipal governments are related to systems development in community general support centers.     

Financing long-term care with limited resources: combining the resources of the public and private sectors

Under Connecticut's recently implemented public/private partnership to finance long-term care, individuals will no longer need to impoverish themselves in order to receive Medicaid assistance. To encourage those people who can afford to buy a private long-term care insurance policy to do so, the state promises to shield one dollar in assets from Medicaid "spend-down" rules for every dollar a private policy pays out for Medicaid-covered services. This article describes the Partnership, shows how dwindling resources and budget constraints affected the development of this model, and then contrasts Connecticut's experience with that of other states and describes what can be learned from this demonstration.     

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.     

Financing Long-Term Care with Limited Resources

Under Connecticut's recently implemented public/private partnership to finance long-term care, individuals will no longer need to impoverish themselves in order to receive Medicaid assistance. To encourage those people who can afford to buy a private long-term care insurance policy to do so, the state promises to shield one dollar in assets from Medicaid "spend-down" rules for every dollar a private policy pays out for Medicaid-covered services. This article describes the Partnership, shows how dwindling resources and budget constraints affected he development of this model, and then contrasts Connecticut's experience with that of other states and describes what can be learned from this demonstration.     

Employer-sponsored long-term care insurance: best practices for increasing sponsorship

Behind the enthusiasm of policymakers for long-term care (LTC) insurance is the belief that increased ownership of private LTC insurance will reduce the government's future liability for financing the nation's LTC needs, currently projected by the Congressional Budget Office to increase by 2.6 percent annually between 2000 and 2040. Some observers say that sustained economic growth could keep these increased expenditures at the same share of total GDP; others argue that current federal expenditure trends will become unsustainable without large tax increases. The potential of the employer-sponsored group LTC market to stave off a national LTC financing crisis has recently started to receive popular notice in the news media. However, for the potential of the group LTC market to be realized, there must be widespread employer sponsorship of group LTC plans and significant participation levels among eligible employees in these plans. The present analysis of industry data estimates the LTC plan sponsorship rate for all U.S. employers with 10 or more employees at 0.2 percent. The sponsorship rate among large employers is significantly higher (8.7 percent). The greatest growth opportunities are projected to lie in the smaller employer market, because it is enormous and virtually untapped. Nonsponsors cite a variety of barriers to employer sponsorship of LTC plans. For many nonsponsors, the most important obstacles are the intrinsic characteristics of their work forces: employees are too young, transient, part-time, and/or low-income to be suitable for LTC insurance. For many others, lack of awareness and low priority are the primary obstacles. Because group LTC insurance has been widely available for only 10 years, many benefits managers view it as "too new and untested." Prior to the passage of the Health Insurance Portability and Accountability Act (HIPAA), in August 1996, the tax treatment of long-term care insurance premiums was unclear because Congress had not addressed the issue and the Internal Revenue Service had not issued clear guidance. In essence, HIPAA served to clarify the tax status of LTC insurance and establish product criteria for tax qualification. The interventions contained in HIPAA appear to have been insufficient to stimulate coverage growth rates that will meaningfully reduced the future burden on government financing of LTC. Although employment-based LTC insurance appears to be the best mechanism for mass expansion of coverage at affordable rates, the data suggest that employer sponsorship of LTC plans is relatively rare, especially among smaller employers, and that sponsorship rates may not dramatically increase without significant investments in employer education and new incentives.     

Health Maintenance Organizations

Health maintenance organizations and similar pre-paid health plans are an alternative form of health care available to Medicare beneficiaries in some areas of the country. While proponents of HMOs have argued that these plans may be better suited than fee-for-service medicine to provide care to an older population, HMOs have played a relatively small role in health care of the elderly. This paper traces federal health policy relating to HMOs and Medicare and describes obstacles to HMO Medicare programs stemming from those policies. It then examines the Massachusetts experience in HMO program development as a case study of how state policy can play a critical role in implementation of policy objectives at a local level. The paper demonstrates how an active state policy involving the executive and legislative branches, elder advocacy groups, and the private sector created a public-private partnership to develop HMO programs for the Medicare population. When this paper was completed, however, Medicare HMO development in Massachusetts was at a standstill, waiting for several critical problems of federal policy to be resolved.     

新加坡医疗体系优势及其对上海的启示

新加坡在医疗保健领域取得令人信服的成就,发展出三级医疗服务体系、3P医疗机构体系、六大区域医疗集团、四级病房体系和3M医疗保险体系,成效显著,赢得本国民众和国际社会的高度评价。上海可借鉴新加坡医疗保健领域取得的成功经验,组建区域性医疗联盟,加速医疗信息化进程,引进国际医学院,适度发展国际医疗和私人医疗,加速推进上海国际医学园区建设。     

Ways of thinking about the long-term care of the baby-boom cohorts

In examining various ways of thinking about the development of long-term care policy for the baby-boom cohorts, this article discusses the importance of basing long-term care policy discussions on a recognition of social and economic trends, as well as on the informal exchanges of care that occur over life and the diversity within the baby-boom cohorts. The implications of two ways of thinking about challenges posed by the aging of baby boomers--the generational equity/crisis perspective and the generational investment/gradual adjustment perspective are also discussed. It is suggested that the generational equity perspective is consonant with proposals to expand private savings for long-term care contingencies and private long-term insurance and, secondarily, with proposals to expand means-testing for benefits. The second perspective is more consistent with proposals to create new universal services through a traditional social insurance approach, or through a block grant such as the one discussed in the context of the Clinton health care reform plan.     

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.