A new report explores the advantages of combining front-end private coverage and back-end public catastrophic coverage of long-term care.
A new report from the Jewish Federation of North America (JFNA) addresses the need for a public-private partnership to provide long-term care insurance for older adults with significant needs for long-term services and supports (LTSS).
A Dynamic Campaign to Educate and Engage Constituencies for a Federal Catastrophic Long-Term Care Insurance Program is based on research and stakeholder engagement work by Eileen J. Tell for JFNA’s Senior Health Resource Center (SHRC). Tell is a fellow at the LeadingAge LTSS Center @UMass Boston. The RRF Foundation for Aging funded the project.
The report presents findings from SHRC’s year-long investigation into strategies for successfully engaging private sector stakeholders in a Federal Catastrophic Long-Term Care Insurance Program. The “Federal Catastrophic” would assume the risk for long-term care needs that require the most expensive care and have the most prolonged duration. Such a program would enable working people to control their choices and assets to the end of life.
“While private long-term care insurance has served well those who have had it, these products do not hold the potential to be a broad-based solution for several reasons,” says the report.
For example, most families lack the disposable income to purchase long-term care insurance policies or do not prioritize purchasing these policies over more immediate needs. In addition, roughly 30% of the population age 50 and older would not meet the insurer’s underwriting criteria.
“But as a companion product to a public catastrophic program, private long-term care insurance could reach a much broader population,” concludes the report. “Removing the catastrophic risk component would make plans less expensive and might enable more relaxed underwriting for certain kinds of risks.”
The report summarizes the insights of stakeholders, subject matter experts, policymakers, and researchers. These insights were gathered through literature reviews, interviews, and stakeholder participation in SHRC’s Long Term Care Advisory Panel meetings.
The report also presents recommendations for future work, including:
- Identifying and engaging with additional stakeholders to build support for long-term care financing reform.
- Improving messaging about the Federal Catastrophic by focusing on the need for retirement security and tailoring messages to various stakeholders, including state policymakers, business leaders, families of varying economic backgrounds, financial planners, and the financial services industry.
- Conducting public relations and media outreach about the Federal Catastrophic concept and the opportunities it presents for various stakeholders.
- Identifying alternative approaches to funding the Federal Catastrophic if legislative sponsorship and passage are not feasible.
“Without a public-private partnership, Medicaid costs will skyrocket, given both health and long-term care liabilities,” says Tell. “As the Baby Boom generation retires, a program that is affordable, understandable, and enables Americans to make plans to cover the risk of long periods of needing long-term services and supports is critical.”
Read more about this report.