Current methods for financing long-term services and supports are “unsustainable, irrational and unfair,” according to new research released Wednesday by LeadingAge.

“Perspectives on the Challenges of Financing Long-Term Services and Supports” builds on research from LeadingAge, AARP and the SCAN Foundation first released in late 2015. The research, conducted by the Urban Institute and Milliman, Inc., analyzed three approaches to LTSS financing:

  • A front-end only benefit that provides coverage relatively early in the period of disability, but caps benefits at two years of LTC need

  • A back-end, “catastrophic-only” benefit with no lifetime limit

  • A combined comprehensive benefit that began after a 90-day waiting period and provided a lifetime benefit

While the final report found no ideal solution among the three approaches studied, the study’s results showed an urgent need for an LTSS financing system that is “insurance based and guided by the principles of rationality, equity and affordability,” according to the authors.

“LeadingAge has long believed that the current financial infrastructure supporting LTSS is broken,” said LeadingAge President and CEO Katie Smith Sloan in a news release. “The great work by Urban Institute and Milliman Inc. now confirms this, and gives us a platform for working with policymakers to fix it.”

While LeadingAge said it supports additional analysis of financing approaches, the group believes a mandatory, universal insurance option is the best choice to minimize costs and optimize coverage.

Click here to read the full LeadingAge Pathways report.