Option

Pros

Cons

Recommendations

[1]
Long
Term
 Care Insurance (Ltci)

 
• Most recognized and utilized option

• Pools the risk of LTC

• Targeted specifically at LTC

 
• Only one of many risks that younger people must address, and seen
as lower priority

• Must be purchased before needed

 
• Ensure comprehensive consumer protection measures.

• Follow up on employer interest in distributing information on LTC.

• Evaluate feasibility of expanding current state LTCI program to all public employees.

[2]
Partner-Ship For
Long-Term Care

• Clarifies and sets level of individual expenditure for LTC and once met, offers “back-end” coverage of remaining LTC costs through Medicaid

• Increases consumer protections by setting standards for LTCI policies

 
• Requires Congressional action to allow more states to establish program

• Medicaid savings unclear (how many Partnership members would have purchased LTCI anyway, and if they would have used Medicaid)

 
• Monitor efforts at the federal level to eliminate prohibition on new state programs.

• Study possibility of broadening concept of partnership to allow other LTC expenditures to
count toward asset protection.

[3]
Nursing Home Care Into Medicare-Related Coverage

 
• Ideally, this would expand number of seniors with some coverage for nursing home care

 
• Would damage the Medigap market by making premiums unaffordable for most current policyholders

 
• Do not mandate this option.

• Medicare plans should be allowed to offer LTC benefits if they see a market for this as Medicare reform
becomes clearer.

[4]
Health Insurance Options That Include Long-Term Care Coverage

 
• Only option that can address the conditions that cause LTC need

• Public sector options use this model to improve chronic care management

 
• No options now available in Minnesota for general Medicare market

 
• Work with health plans to explore how integrated acute and LTC could be made more available to pre-
Medicaid elderly and the general Medicare population.

[5]
Life Insurance Options That Include Long-Term Care Coverage

 
• Permanent insurance option provides multiple uses through one vehicle—life insurance, LTC coverage, possible loan/savings

 
• LTC coverage more limited than what is available through LTCI or health insurance

 
• Encourage development of linked benefit products that provide both life and LTCI.

[6]
Reverse Mortgages

 
• This option can be accessed by nearly all elderly individuals 62+ because of high homeownership rates

 
• Relatively expensive because of the fees and cost of mortgage and annuity

 
• Explore impact of state discount of fees if money is used for LTC costs.

[7]
Family Loan Or Line Of Credit

 
• Most immediate source of money to pay for LTC

• Only used if and when needed

 
• Increases debt of adult children especially if proceeds from estate are not available to help repay loan

 
• This type of program should be initiated in Minnesota and monitored to see how it might fit into a comprehensive family support strategy.

[8]
Universal Public Savings Plan

 
• Most inexpensive option per person because it spread the costs and risk across all taxpayers in state

 
• Provides only one year of benefits and those covered may not take steps to provide additional coverage

 
• Monitor efforts by other states to review or implement this model.

[9]
Long-Term Care Annuity

 
• Combines risk of long life with LTC risk

 
• Current products require substantial investment

 
• Encourage additional development of these products at a more affordable price.

Note: from Public and Private Financing of Long-Term Care in Minnesota 
Summary of Legislative Report February 2005