The feasibility of a public-private long-term care financing plan.
In this study, the feasibility of a public-private long-term care (LTC) financing plan that would combine private LTC insurance with special Medicaid eligibility requirements was assessed. The plan would also raise the Medicaid asset limit from the current $2,000 to the value of an individual's insurance benefits. After using benefits the individual could enroll in Medicaid. Thus, insurance would substitute for asset spend-down, protecting individuals against catastrophic costs. This financing plan was analyzed through a computer model that simulated lifetime LTC use for a middle-income age cohort beginning at 65 years of age. LTC payments from Medicaid, personal income and assets, Medicare, and insurance were projected by the model. Assuming that LTC use and costs would not grow beyond current projections, the proposed plan would provide asset protection for the cohort without increasing Medicaid expenditures. In contrast, private insurance alone, with no change in Medicaid eligibility, would offer only limited asset protection. The results must be qualified, however, because even a modest increase in LTC cost growth or use of care (beyond current projections) could result in substantially higher Medicaid expenditures. Also, private insurance might increase personal LTC expenditures because of the added cost of insuring.
Arling
G
G
Center for Health Systems Research and Analysis, University of Wisconsin, Madison 53706.
Hagan
S
S
Buhaug
H
H
D000368:Aged; D000369:Aged, 80 and over; D002388:Catastrophic Illness / Q000191:economics*; D003153:Community Health Services / Q000191:economics; D003365:Costs and Cost Analysis; D005240:Feasibility Studies; D005382:Financing, Personal / Q000191:economics; D005102:Health Expenditures / Q000706:statistics & numerical data; D006801:Humans; D007353:Insurance, Long-Term Care / Q000191:economics*; D008134:Long-Term Care / Q000191:economics*; D008484:Medicaid / Q000191:economics*; D017059:Models, Econometric; D009735:Nursing Homes / Q000191:economics; D014481:United States; D014922:Wisconsin