Universal insurance program needed for LTC financing reform, group says

It's not "realistic" to create an effective voluntary LTC insurance model, Gleckman says
It's not "realistic" to create an effective voluntary LTC insurance model, Gleckman says

A universal catastrophic insurance program is the “most promising approach” to reforming how long-term services and supports are financed, according to a new report.

That report, released Monday by the Long-Term Care Financing Collaborative, detailed a universal catastrophic insurance program as the option “most likely to meet the test of fiscal sustainability.” The LTCFC includes former Department of Health & Human Services officials, SCAN Foundation members and provider group representatives.

A universal program would “significantly” reduce Medicaid's LTSS expenditures, be more broadly affordable than current voluntary insurance programs and provide the greatest enrollment increases, the group said. Creating a universal program would also help avoid the challenges of “adverse selection,” where the people most likely to claim benefits are also more likely to purchase coverage, which in turn drives up premiums.

“The only thing that's left is a universal program,” said Howard Gleckman, Urban Institute senior fellow and founding member of the LTCFC. “It's not possible to create a realistic model for a voluntary program.”

The group also recommends “modernizing” Medicaid's LTSS to protect consumers whose incomes won't cover their long-term care needs, and those who deplete their assets paying medical bills. The report also calls for public policies and private sector initiatives to address non-catastrophic LTSS risk.

“America's most expensive option is doing nothing,” said Gretchen Alkema, Ph.D., vice president of policy and communications for the SCAN Foundation.

The LTCFC report is the third one this month to suggest a universal insurance program as the most sustainable solution to LTC financing.

Last week, a report from LeadingAge pinpointed a mandatory insurance plan as the best choice to minimize costs and maximize coverage. Earlier this month, the Bipartisan Policy Center suggested an insurance program linked to retirement benefits as a solution to the growing demand for LTSS.

Click here to read the full LTCFC financing reform report.