|
Long-Term
Care Financing Options:
Pros, Cons and Recommendations |
|
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 vehiclelife 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 |
