Blog

By Steve Syre

LTSS Center Co-director Marc Cohen led a bipartisan working group that prepared a report on major issues and options for state social insurance plans.

States exploring the options for social insurance programs to help their residents afford long-term services and supports (LTSS) have a lot of policy decisions to make. A plan that can work in one state won’t necessarily succeed in another.

A 16-member working group led by Marc Cohen, co-director of the LeadingAge LTSS Center @UMass Boston, has produced a detailed report that can help state leaders identify the key issues involved in developing a social insurance program to address LTSS needs. The report also suggests a range of strategies states can choose to address each issue.

A GUIDE FOR POLICY MAKERS

“There is no one way for states to create viable social insurance plans to help families and individuals afford the long-term services and supports they need,” said Cohen, whose bipartisan working group spent a year researching state-based options. “But this report is intended to be a guide for policy makers to help them design plans that will work best for them.”

The working group’s research was part of a larger report recently published by the National Academy of Social Insurance. Designing Universal Family Care: State-based Social Insurance Programs for Early Child Care and Education, Paid Family and Medical Leave, and Long-Term Services and Supports was supported by the Ford Foundation and Caring Across Generations.

About $310 billion is spent annually on LTSS across the country, roughly half of which is covered by Medicaid. Unpaid care with an estimated value of $470 billion per year is provided primarily by family members. Demand for LTSS services is expected to grow dramatically in the years ahead as an aging population requires more help.

Earlier this year, Washington state enacted the landmark Long-Term Care Trust Act, which established a program that will pay up to $100 per day to help cover LTSS services received at home, in the community, or in a care setting. The new program will provide a maximum of $36,500 over the lifetime of the beneficiary.

CORE DESIGN ISSUES FOR STATE-BASED PLANS

Policy makers from any state considering how an LTSS social insurance plan might work are influenced by their own local demographics, economics, and politics. But Cohen said all states need to think through choices related to 4 key issues, including:

1. Program structure. States need to decide who will be eligible for program benefits. Is insurance available only for older adults or all residents with disabilities? States also must consider whether coverage will be comprehensive or limited in some way.
2. Financing approach. Social insurance plans come with 2 important decisions about money. First, is the plan funded by a payroll tax, income tax, or some revenue source? Second, will the plan be pre-funded or operate on a pay-as-you-go basis?
3. Program integration. How will a new program work with the existing LTSS financing and service delivery systems? Successful integration will ensure benefits are paid appropriately and consumers do not have to deal with discontinuation of any coverage. Integration will also make accurate program accounting and financial forecasting possible.
4. Program implementation strategy. The nitty-gritty details of any LTSS social insurance plan involve program administration, revenue collection, eligibility determination, ongoing program management, program integrity, and evaluation.

“There are tradeoffs among all the different approaches to these core design choices,” said Cohen. “But generally speaking, social insurance represents a promising approach to meeting the challenges states face in ensuring broad access to LTSS.”

GOALS FOR AN LTSS SOCIAL INSURANCE PROGRAM

Any state plan needs to be established with specific goals in mind and later measured by its success in achieving those goals, Cohen said. Some of the objectives states should consider include:

• Improving access to LTSS. To what extent does the additional money brought into the LTSS system by the new program allow the purchase of additional services?
• Improving key outcomes for people with disabilities. To what extent does greater access to paid LTSS improve the health and well-being of people with disabilities?
• Reducing family out-of-pocket spending. To what extent does the program relieve financial burdens on families?
• Improving key outcomes for family caregivers. To what extent does access
  to paid LTSS services make it possible for family caregivers who want to work more and increase their income? Does the program support the improved well-being of family caregivers?
• Reducing Medicaid spending. To what extent does the program reduce budgetary pressure on Medicaid?
• Financial sustainability/stability. Can the program be paid for over the long term in a stable manner?
• Political support and sustainability. Is the program able to develop public support and maintain it over time?

“The issues involved in LTSS financing are complex and require thoughtful deliberations involving a range of stakeholders,” Cohen said. “But individual states can become leaders confronting this important national challenge.”