Protecting Consumers and Medicaid from Catastrophic Long-Term Care Costs

June 2020
Full report

By adopting the NAIC’s Guaranty Fund Model Act provisions, states can strengthen the structure of guaranty funds to reduce consumer risks and minimize liabilities to Medicaid resulting from long-term care insurance (LTCi) insolvencies. States can further address risk by considering policy options to strengthen long-term care financing outside of the Medicaid program.

LTCi is a financial product that promises over 7 million policyholders benefit payments for long-term services and supports (LTSS) — such as home and community-based services — should they experience a high need for these services. LTCi plays an important role in protecting individuals against the risk of spending their income and assets on expensive LTSS, and relying on Medicaid. However, the current LTCi environment threatens these protections for policyholders.

With support from the Elevance Health Public Policy Institute, ATI Advisory — a research and advisory firm focused on healthcare and aging — researched and identified the implications for Medicaid of increasing the stability of the funding pools that protect private long-term care insurance policyholders against carrier insolvencies.

Topics

  • Evolution of private LTCi
  • LTCi industry challenges and responses
  • Challenges for Medicaid
  • Public and private solutions moving forward

Related Public Policy Research

Value in Long-Term Care Insurance Policies
January 2021
Policies bought from 1995 to 2005 had nearly $800 billion in benefit value available. Buyers in the 1990s had greater risk of Medicaid spend-down absent a policy than more recent purchasers.
Improving State Guaranty Funds Can Strengthen Consumer Protections and Market Stability
September 2018
State guaranty funds can be improved by expanding the base of health insurers that contribute to the funds and equalizing the burden shared between life and health insurance companies.
Coordinating Medicaid Long-Term Services and Supports
May 2017
MCOs deliver coordinated, high-quality LTSS that promotes self-direction and helps individuals remain in their homes, live independently, and engage meaningfully in their communities.

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