Map of life expectancy at birth from Global Education Project.

Thursday, January 14, 2016

Long Term Problem

John Iglehart, in the new NEJM, does the Cassandra thing with Long Term Services and Supports, also called Long Term Care. (I'm not sure what the public access is to this piece.) The kicker is that right now, this problem is getting essentially no attention from politicians.

Most people who have chronic disabling conditions get most of their care from unpaid family members or friends -- some 40 million people currently in that role. Many of them end up leaving the workforce because they can't handle both jobs simultaneously. What many people don't seem to know is that their health insurance -- whether it's private insurance or Medicare -- won't pay for long term health care, in a nursing home or in the community, and won't pay for essential non-medical services such as housekeeping. It costs more than $90,000 a year to be in a nursing home, and $43,000 to be in an assisted living facility or to get full-time home health aide services. Very few people have that kind of money.

Right now about half the people who need LTSS are over 65 but that percentage, and the absolute number, will obviously increase as the population ages. Not everybody will ever need to pay for LTSS -- some of us are lucky enough to die before we develop severe disabilities -- and others won't ever have to pay for it because we'll be able to rely on family members. But 16% will spend more than $100,000 and few elderly people have that kind of money. I think you know what happens in that case -- you have to spend everything you have, then Medicaid takes over.

It is possible to buy long-term care insurance but it is very expensive and hardly anybody has it. While the Republicans are all promising to repeal the Affordable Care Act, neither they nor Hillary nor Bernie are saying anything about this problem. It's solvable the same way many of our other severe problems are -- tax the rich.

1 comment:

Scott A Olson said...

This statement you made is not 100% accurate. You stated: "It is possible to buy long-term care insurance but it is very expensive and hardly anybody has it."

7.2 million people currently own LTC insurance. To say "hardly anybody has it" would mean that several million people is "hardly anybody".

The poor don't need long-term care insurance. The poor get their LTSS paid for by Medicaid. The only people who need long-term care insurance are the middle-class.

Fortunately, 44 states in cooperation with the federal gov’t have already launched an affordable solution: a Public/Private Partnership for Long-Term Care.

These “Long-Term Care Partnership Programs” encourage the middle-class to purchase long-term care insurance policies with benefits equal to their net worth. If their long-term care insurance policy runs out of benefits they can apply for Medicaid to pay for their care and all of their assets will be protected from Medicaid “spend down” and Medicaid “estate recovery”.

For example, a married couple both age 61, in average health, could share a Long-Term Care Partnership Policy with $250,000 of benefits. Their premium would be about $100 per month per spouse. If they used all $250,000 in the policy, they could apply for Medicaid and protect $250,000 of their savings from Medicaid.

If you want to protect more savings you can buy more benefits for a higher premium.
If you have less savings you can buy less benefits for a lower premium.
You can target how much coverage you want based upon how much of your savings you want to protect from Medicaid.

In all cases, a lifetime of savings can be protected through a Long-Term Care Partnership Policy.

The Long-Term Care Partnership Programs are the equitable solution to the crisis facing our nation. The wealthy pay more to protect more assets. The “not-so-wealthy” pay less and can still protect all of their assets.

Scott A. Olson