Long-term care and the private insurance market

Increased life expectancy and the aging of the baby boom generation will bring rapid growth in the number of people at risk of needing long-term care (LTC). This Issue Brief provides an overview of the current LTC financing and delivery system in the United States, focusing on private-sector initiatives to meet the United States' LTC needs. It discusses private-sector plan design--particularly employment-based plan design--providing an in-depth look at the dramatic changes taking place in the private-sector LTC market since its inception in the early and mid 1980s. Aside from informal care provided in the community, the current system of financing LTC depends largely on the Medicaid program and individual financing. Issues confronting this system include spiraling costs associated with LTC services that may threaten beneficiaries' access to care. Other issues include the potential depletion of personal assets and a bias toward institutionalization (which may not always provide the most cost-effective or desired type of care available). Many leaders regard private long-term care insurance (LTCI) as a way to increase access to financing and as a potential alternative to Medicaid and out-of-pocket financing. By the end of 1993, a total of 3.4 million private-sector LTCI policies had been sold, up from approximately 815,000 in 1987. While the majority of these plans were sold to individuals or through group associations, employment-based plans accounted for a significant proportion of this growth. Premiums for LTCI vary substantially based on age and plan design. Insurers generally attempt to set premiums such that they will remain level over the insured's lifetime. However, because little LTC claims insurance experience yet exists, the actuarial basis for developing premiums and statutory reserves is limited. Several bills over the last three Congresses have been introduced to address the issue of LTC. However, due to cost implications and lack of consensus regarding the optimum overall structure required to finance and deliver care, broad legislation to expand coverage--particularly public coverage--is not likely in the near term.

Can regulation improve long-term care insurance? Lessons from the Medigap experience

This article uses recent experiences from the Medigap market to draw conclusions about the advisability of alternative methods of regulating the market for long-term care insurance. The analysis is based in part on interviews of state insurance regulators, insurance companies, and interest-group representatives. The authors conclude that some regulation of the market is appropriate, but that the structure and extent of regulation found in the Medigap market would likely be inappropriate for the long-term care insurance market at this time.

No long-term solutions in current health care reform proposals

As this article goes to press, it is nearly impossible to predict what sort of health reform plan will ultimately be passed, if any, and whether any form of long-term care coverage will be included. The need for such coverage will not, however, diminish with the close of the current congressional session and is likely to be a topic of debate for some time. The entire process of health reform legislation has been one of paring down initial hopes and expectations, and it may take many more years, until an even larger segment of our population is aged, before log-term care coverage becomes politically and fiscally desirable enough to withstand the political process.

Home care coverage improvements anticipated under health care reform

Health care reform will affect home care and hospice providers in ways that are as yet unclear. One thing that is certain, however, is that reform will open new doors for providers under both federal and private reimbursement systems. This review of current coverage and existing opportunities gives a background from which providers can look to the future.

[Determination or expert assessment of eligibility for intensive nursing care?--Comments on a decision by the Federal Social Court (4RK 1/92, passed down 30 September 1993)]

A decision by the Bundessozialgericht, the Supreme Social Court of Germany, determining "Schwerpflegebedürftigkeit" (permanent need of very intensive nursing care) is discussed from the viewpoint of a physician in the Medical Service of Health Insurances, in respect of the Court's definition of "Schwerpflegebedürftigkeit", which is different from the one the Health Insurances had agreed upon so far, the physician's part in finding out who is entitled to the benefits related to "Schwerpflegebedürftigkeit", the question whether and to what extent "Schwerpflegebedürftigkeit" has to be assessed by an expertise of the Medical Service of the Health Insurance, the possibly increasing importance of court decisions in the procedure of gaining benefits justified by "Schwerpflegebedürftigkeit".

Legal issues in home care--1994

Expanding home care services opens the industry to legal considerations from every angle. This article serves as an overview to this issue of CARING, touching on salient points of the legal issues important to home care providers.