time the beneficiary has gone 60 days
without hospitalization or Medicare-sponsored LTC.
Medicaid, on the other hand, covers
skilled, rehabilitative, and custodial care,
but primarily in skilled nursing homes. In
order to qualify for Medicaid’s LTC services, the beneficiary’s personal income
and asset holdings are under strict limits, and he or she must meet the medical
requirements established by the state.
Medicaid has an “institutional bias,”
which makes it more difficult to get community-based services. In addition, there
is little to no coordination between Medicare and Medicaid, which may increase
unnecessary use of hospitals, nursing
homes, and other medical services.
Private LTC insurance usually covers skilled, rehabilitative, and custodial
care in all types of care settings for an
insured with a loss of at least two ADLs.
There is currently no care coordination
among Medicare, Medicaid, and private
Generally, public programs such as
Medicaid and Medicare are the primary source for providing LTC services,
followed by out-of-pocket expenses.
Private insurance covers LTC needs for
only a small percentage of the population. The number of people age 85 and
older in the United States who will
likely need LTC services is expected
to increase significantly in the future.
The Lewin Group projects that national expenditure on LTC services for the
elderly (age 65+) will nearly quadruple
from 2010 to 2050.
In order to reduce the financial stress
on Medicaid due to the expected rise in
national expenditure on LTC services, a
partnership program between Medicaid
and private LTCi was created by a few
states. This partnership was done to en-
courage people to better plan for their
LTC needs and not to rely solely on Med-
icaid as the primary source for their LTC
needs. The partnership program encour-
aged people to purchase eligible private
LTCi policies to protect their assets and
avoid impoverishing themselves in case
they need LTC services for a significant
period of time. A person who purchased
a partnership-eligible private LTCi poli-
cy can keep assets up to the face value of
the policy and can still qualify for LTC
services under Medicaid.
Some of the requirements of the pri-
vate LTCi policies that would qualify
for the partnership program are explic-
itly defined. Most commonly, these are
specific requirements concerning ben-
efit period (how long the policy will pay
benefits) and elimination period (how
long the policyholder must pay for ser-
vices before claiming benefits from the
insurance company) and embedded in-
flation protection benefits. The inflation
protection benefit intends to protect
Daily Treasury Yield Rate Curves
10-Year Treasury Yield
20-Year Treasury Yield
30-Year Treasury Yield
‘AA,’ ‘A,’ and “BBB’ 10-Year Rating Category Composite Spreads
Data as of April 29, 2011. Source: Standard & Poor’s Global Fixed Income Research. © Standard & Poor’s 2011.
2003 2004 2005 2006 2007 2008 2009 2010 2011