A Policy Fix for Long-Term Care?

If there’s good news in the realm of long-term care costs, it’s that the issue is showing up on the public policy radar.

That’s a prerequisite to solving the bad news: While about half of Americans who are 65 today won’t have any long-term care costs, many others will have costs in the tens or hundreds of thousands of dollars. About 15 percent of us will need help to a degree and over a long enough period that it will cost us and our families $250,000 or more,  on average, according to recent research and estimates by the Urban Institute.

On March 1, the House Energy and Commerce Committee's Subcommittee on Health held a hearing, “Examining the Delivery and Financing of Long-Term Care.” It marks one of the few times federal lawmakers have looked at long-term care financing since the repeal three years ago of long-term care provisions that were part of the 2010 Affordable Care Act.

The lead-up to the subcommittee hearing has been three sets of policy recommendations released in February. They came from the Bipartisan Policy Center formed by former Senate majority leaders from the Democratic and Republican parties; LeadingAge, an association of long-term care providers and the Long-Term Care Collaborative of Convergence: The Center for Policy Resolution.

There are differences in their recommendations, but some key common elements, too:

• Recognition that the current system of paying for long-term care (mostly out of families’ pockets, then with Medicaid when personal funds are wiped out) is broken and inadequate as the number of elderly in the country booms
• Recognition that private long-term care insurance (LTCI) as it exists today can’t fix the problem  As economist Alice Rivlin says in her prepared statement for the House subcommittee: “Both demand and supply of LTCI are weak and falling” due to cost and other reasons of market dynamics. All three sets of policy proposals include ideas to revitalize the private market.
• Proposals for universal public insurance programs, especially for coverage at the catastrophic end of the cost scale, where families and private insurers are feeling the most pain

Any public insurance program would, of course, have costs attached and the three policy study groups differ in how they would cover them. But universal insurance for long-term care is an idea already being examined at the state level. A proposal has been up for consideration in Hawaii’s state legislature this winter.