More on long-term care: Another unresolved issue in health reform

My latest Kaiser Health News essay on long-term care insurance: a huge unresolved issue in health reform.

Whatever happens to health reform before 2012, we’ll be back soon for other rounds of both delivery and finance reform.

One huge set of problems concern long-term care. Individuals risk losing their lifesavings if they contract dementia or heart failure and require prolonged nursing home care. For a variety of reasons, private insurance is inherently ill-suited to this market and is not working well. Less than 4 percent of American adults have long-term care insurance. Meanwhile states are struggling with Medicaid costs and, in some cases, are announcing punishing cuts. The new CLASS act will be valuable, but will not resolve many important issues for the current and future disabled. Moreover, I and many other health policy wonks are concerned about the political and administrative challenges facing this new program.

In short, our current system of financing and delivering long-term care is in serious trouble. See my latest Kaiser Health News column for more….

Author: Harold Pollack

Harold Pollack is Helen Ross Professor of Social Service Administration at the University of Chicago. He has served on three expert committees of the National Academies of Science. His recent research appears in such journals as Addiction, Journal of the American Medical Association, and American Journal of Public Health. He writes regularly on HIV prevention, crime and drug policy, health reform, and disability policy for American Prospect, tnr.com, and other news outlets. His essay, "Lessons from an Emergency Room Nightmare" was selected for the collection The Best American Medical Writing, 2009. He recently participated, with zero critical acclaim, in the University of Chicago's annual Latke-Hamentaschen debate.

4 thoughts on “More on long-term care: Another unresolved issue in health reform”

  1. I'm less concerned with individuals who must spend their lifesavings to pay for their own long term care than with those who have already spent their savings or never had the means to pay in the first place. I would think that the main reason why private insurance for long term care doesn't work is that it is very expensive, limiting its utility to those wealthy enough not to need it and the benefits are not all that great. Does Medicaid fund long term care? If so, I hardly see why those who have lifesavings to spend should be able to preserve their lifesavings for their heirs. But then I'm in favor of a confiscatory estate tax also.

  2. I once looked at LTC policies for my parents. I concluded that, with the availability of Medicaid, it was only useful as an estate-protection device for middling-large estates. Really large estates did not need it, because they could pay for most LTC. Smaller estates didn't need it, because it was cheaper to skip the premiums and go onto Medicaid.

    I wanted to make one other point. In his Kaiser piece, Harold said that the average nursing home stay was 2.5 years. That sounds about right, but I think is very misleading. The median nursing home stay is a few weeks to months–largely covered by Medicare. This is mostly rehab, in-house hospice work, and hospital transitions back to home. Then there is the long tail–especially dementia and elderly poverty. Nursing homes populations are not homogeneous.

  3. Worth noting that the British NHS is not a model for this (though poor people are surely much better off anyway than in the States. The argument is over whether old people should be forced to sell up their homes first before getting free care. Royal Commission report of 1999 here – with important minority dissent.

  4. If you are a real policy wonk, you must have figured out that the Class Act will never actually pay any benefits, (and few will take it up). There is a five year waiting period, and the only people who will up for it will be the chronically ill. It is actuarially unsound, and the benefits are way too meagre to substitute for an actual LTC policy. Moreover, there is no realistic way that Medicare can provide a substitute, and LTC is already breaking the medicaid system, which is in turn breaking the states.

    It is largely correct that LTCI is a middle class product, since the wealthy can self-insure. More and more of the wealthy are realizing they should no more self-insure this risk than their home, though. Partnership LTCI sales are the only solution to this mess, and they are growing, albeit too slowly. Ground level payroll deduction LTCI plans are needed for lower middle class workers.

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