Long-term Care Public and Private Partnership Program
The policy problem involved is the general effectiveness of the partnership programs on the long-term care insurance coverage for the aging. This is in relation to the partnership policy sales over the recent years as a reflection of the long-term care insurance market overall trends (FDHC, 2014). A significant number of the partnership policies are believed to be comprehensive to cover both home and community-based care and nursing home care. The purchase in individual based rather than organization-sponsored approach. The problem on the policy issue surfaced upon the denial of close to 16 percent applications with the majority approved. This came with variations in the coverage amount purchased through partnership shareholders across four states. The partnership program was designed to encourage the purchase of private care insurance. The policies have been proven tax qualified under the federal law. It provided inflation protection for policyholders and asset protection in cases involving policyholder’s application for long-term care Medicaid assistance (FDHC, 2014).
Long-term Care Public and Private Partnership Program were established in 1987 as one of the demonstration projects financed by the Robert Wood Johnson Foundation. Four states as the major facilitators of the demonstration project, including Connecticut, California, New York and Indiana managed to develop partnership programs. The programs were designed with the aim of encouraging the purchase of the created private long-term care insurance (FDHC, 2014). This was especially advised among the individuals with moderate income. This was to enable a significant reduction in unnecessary future reliance on Medicaid to cater for long-term care services. Recent available data indicate of over 172,000 partnership policies active in the four states.
However, there are variation indications on how such partnership programs, protect the assets of policyholders. Connecticut and California programs have models designed based on a dollar-for-dollar approach. Based on such an approach, the dollar amounts of the protected assets correspond to the benefits dollar value as paid through the long-term care insurance policy. A significant example is the case that involves the purchase of a long-term care insurance policy with a value up to $150,000 as coverage would have an asset value of $150,000 coverage (Issue Brief, 2007). This is when an individual decides to exhaust the benefits of long-term care insurance and apply for the Medicaid. The program based in New York necessitates the purchase of a reliable long-term care insurance policy. This is to cover a minimum of 3 years based nursing home care and a 6 year based home and community care. The policy offers a total asset protection for entire purchaser’s assets during the Medicaid eligibility determination time (Issue Brief, 2007).
The Indiana based program utilizes a hybrid model which enables the purchasers to secure dollar-for-dollar protection. This goes up to a specific benefit level, which is defined by the state. All benefit related policies under the program above a specific threshold provides a total asset protection for the purchaser. The demographics of the program have changed significantly over the years. The average age of the partnership policyholders during the purchase time had a range of 58-63 in Indiana, Connecticut and New York with the ones in California at 60 (Issue Brief, 2007). Most of the partnership policyholders at the time were married females who were purchasing long-term care insurance for the first time. A general survey of the people who purchased the partnership policy in Connecticut and California reported of being in excellent health condition. Most of the partnership policyholder in the three states indicated of owning assets of up to $350,000 in value (Issue Brief, 2007).
When the issue was discussed in the past, a Deficit Reduction Act of 2005 was established with the inclusion of a number of fundamental reforms based on the terms of long-term care services. This was of interest to the many states willing to comply with the program which aided the lifting of the moratorium approach of the partnership programs (Issue Brief, 2007). Under the provisions of the Act, all the states are able to make vital implementations of the long-term care partnership programs based on the approved state plan amendment. This is only after meeting specific requirements. The Act expects programs to have specific outlined consumer protections, especially of the National Association of Insurance Commissioners Model regulations on long-term care approach (Issue Brief, 2007). It also facilitates policy inclusion of inflation protection upon making purchases, and it applies to the people under the age of 76.
Under the policy, care is provided through managed care organizations. Through the policy, most of the active partnership policyholders have been able to access their long-term care insurance benefits. Since the establishment of the programs, the policy has aided in the receivership of long-term care insurance benefits for 251 policyholders in the four states (Issue Brief, 2007). 119 which are 19 percent of the policyholders have also been able to have access to Medicaid. The remaining 53 percent in the program has not been able to access the Medicaid. Interviews with the state officials reveal that it may be as a result of the policyholders spending down their income or having unprotected assets. Their health may have also improved, or immediate families provided the informal care. However, the policy has ensured there is cost saving to the Medicaid program through the purchasing of long-term care insurance benefits (Issue Brief, 2007).
During the purchase of the partnership policy, the average age ranges from 58 to 63 in three states including Indiana, Connecticut and New York. In California, the rate is at 60. Most of the policyholders are female in marriage institutions and purchases the long-term care insurance for the first time. In the three states, the majority of the policyholders report having assets greater than $350,000 (FDHC, 2014). Half or more of the policyholders report of having an average monthly household income more than $5,000. As a result of the aging baby boom generation and the rising cost of services, settling for long-term care has become an issue for the policy-makers. Expenditures incurred under the policy make up the largest part of the long-term care cost in the four states. The cost for nursing home care is part of a significant risk the elderly partnership policy shareholders incur. Up to 27 percent of the men participate in the program at the age of 65 years and above. Approximately 44 percent of women are also policyholders in the program.
Among the policyholders who honor the program policy provisions, 33% men and 42% women spend more time in the program than a year. Most of the households in America turn to the Medicaid program due to lack of resources. The program caters for a major percentage of the total long-term expenditures (Issue Brief, 2007). In 2005, a significant amount of money up to $122 billion was spent on the nursing homes established through the program to care for the participants. This was with an additional cost amounting to $47.5 billion on home-health care. The Medicaid accounts for the expenses in a larger share. The consumers cover 26.5% of the nursing home costs, in addition to the 43.9%, of the nursing facilities cost. The private insurance covers the other remaining 7.5 percent (Issue Brief, 2007).
Some of the options proposed to deal with the policy issues include:
Implementation through coordination with multiple stakeholders: successful implementation of the partnership program issues necessitates an input and effort from a variety of stakeholders. They include private industry, state policy makers and policyholders themselves.
State budget and target population impact: this is based on the idea that the success of the partnership program in facilitating a reduction in long-term care expenditures rely on the ability of the program to encourage Americans with moderate incomes. This is since they would otherwise opt for the Medicaid majorly for potential long-term care requirements and in purchasing private insurance.
Agent and consumer education: based on the complexity of the long-term care insurance program choices, with the additional intricacy of the partnership program, the majority of the people have strong feelings on consumer education and insurance agent training. They suggest that it should be established in new and enhanced state partnership program.
Inflation protection: this is meant to protect the elderly meet the expectations of the program in acquiring the long-term care insurance coverage
The groups that supported these solutions include state agencies such as the Agency for Health Care Administration, and the Office of Insurance Regulation and the Department of Children and Family Services (Issue Brief, 2007). They did this to ensure the program satisfy the requirements of the consumers and ascertain the policy is effective enough for policyholders to benefit adequately. Some members of the congress and consumer advocacy organizations opposed some of the solutions, especially the issue of inflation protection through insisting that implementations be made. This is to facilitate an automated compound inflation protection majorly for the people under the age of 61. When the issue is debated again, they will introduce approaches such as future-purchase protection option to back up their ideas (Issue Brief, 2007).
References
Fdhc.state.fl.us. (2014). Ahca: Florida long-term care insurance partnership program. Retrieved from: HYPERLINK “http://www.fdhc.state.fl.us/Medicaid/ltc_partnership_program/Index.shtml” http://www.fdhc.state.fl.us/Medicaid/ltc_partnership_program/Index.shtml
Issue Brief. (2007). Long-term Care Partnership Expansion: A New Opportunity for States. Robert Wood Johnson Foundation. Retrieved from: HYPERLINK “http://www.chcs.org/usr_doc/Long-Term_Care_Partnership_Expansion.pdf” http://www.chcs.org/usr_doc/Long-Term_Care_Partnership_Expansion.pdf
