Experts talk trade-offs in House hearing on LTC financing

Long-term care industry experts testified on how to reform long-term services and supports at a House subcommittee hearing Tuesday.

The hearing followed last month's release of research and policy recommendations from the Bipartisan Policy Center, LeadingAge and the Long-Term Care Financing Collaborative on the need for LTC financing reform.

All three reports found the current methods of financing to be fiscally unsustainable to support the growing demand for LTC. The reports also all advocated for a public or universal insurance approach, especially for individuals with catastrophic LTC needs.

“A public program, covering truly catastrophic long-term care spending, could overcome this reluctance and reduce the cost of private LTCI,” said Alice Rivlin, Ph.D., co-chairwoman of the Long-Term Care Initiative at the Bipartisan Policy Center during the hearing. “Catastrophic insurance, combined with retirement LTCI from the private market, could substantially relieve families and Medicaid.”

Rivlin also touched on the reports' recommendations to make private LTC insurance more affordable and widely available, as well as streamlining Medicaid for home and community-based care options.

But those recommendations involve with “significant budgetary implications and trade-offs,” Anne Tumlinson, CEO of Anne Tumlinson Innovations, told the group.

“In choosing to focus public insurance on catastrophic risk rather than front-end risk, many people who need insurance for high needs over short durations may not get it, she said. “Correcting for this problem through a comprehensive program design results in higher costs.”

Any insurance options that covers a significant portion of the population will also result in higher spending, an issue that poses a risk to the currently under-financed system, Tumlinson said.

In response to the hearing, House Energy and Commerce Committee Ranking Member Frank Pallone Jr. (D-NJ) said he plans to introduce legislation sometime this year to “provide a federal role” in reforming LTC financing. Pallone's plan includes a proposed “Part E” option for Medicare that would provide financing for LTC.

“Congress must do more to improve the quality and affordability of these services,” Pallone said in a news release. “Now, this can be done in many different ways, but, whatever form this effort takes, we must act with a sense of urgency.”