products that are less risky than the previous generations of LTC policies—all
while making LTCi more affordable for a
wider population. The uninsurable population, who cannot purchase LTCi in the
private market, may need to be covered
under a public insurance program for the
first five years of care.
Because the majority of LTC
services are currently covered by Med-
icaid, private LTC insurers do not
have the leverage to build preferred
provider networks for LTC services.
These networks could be used to make
the providers of care more efficient,
thereby reducing the costs of the LTC
services. By moving to a voucher system
for LTC services and encouraging peo-
ple to purchase private LTC insurance,
the private insurers may get the leverage
they need to build these preferred pro-
vider networks, an outcome that could
make LTCi policies more affordable to
the general population.
National expenditures for LTC
services are expected to increase significantly over the next few decades.
The current partnership program between states and private LTCi to reduce
the burden on Medicaid may not have
performed as expected in reducing Medicaid’s LTC expenditure. One reason for
this may be the high cost of LTC policies
that are eligible under the partnership
program. By changing Medicaid to cover
only catastrophic LTC needs and giving
tax credits or vouchers to purchase private LTCi, the federal government may
help spur innovation in LTCi product
development—ultimately reducing the
burden on public insurance programs
in the future.
SIVAKUMAR DESAI is AVP, closed block
actuary and risk manager at Unum.
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Women Men Total
■ 5+ years
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■ 1 year or less
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