Boosting Medicaid benefits, insurance attractiveness key in new LTC financing plan

Increasing Medicaid benefits for long-term services and making private long-term care insurance more attractive to consumers are among the changes proposed in a new plan for LTC financing.

Current private long-term care insurance policies are too expensive and unavailable to handle the “fiscally unsustainable” growth in demand for long-term services and supports, according to “Initial Recommendations to Improve the Financing of Long-Term Care,” released Monday by the Bipartisan Policy Center. The plan recommends establishing lower-cost, limited-benefit retirement long-term care insurance policies that would supplement existing insurance products, and be more attractive to middle-income individuals.

The proposal also suggests working-age retirement plan participants over age 45 use their retirement savings, with no early withdrawal penalties, to buy retirement LTCI plans. To make the policies more widely available, the plan also recommends giving employers incentives to offer LTCI policies through workplace retirement plans on an opt-out basis.

The initial recommendations also include expanding home and community care options, creating a “buy-in” for working individuals with disabilities whose incomes put their Medicaid access at risk and better accommodating people with significant LTSS needs.

The report was released by former Senate Majority leaders Bill Frist (R) and Tom Daschle (D); Alice Rivlin, former director of the Congressional Budget Office and the Office and Management and Budget under President Bill Clinton; and former Wisconsin governor and U.S. Secretary of Health and Human Services Tommy Thompson.

The group's initial recommendations are a response to the Bipartisan Policy Center's 2014 report “America's Long-Term Care Crisis: Challenges in Financing and Delivery.”