Long-Term Care Insurance: High Price, Lack of Understanding Hurt Sales in Indiana

Program to Promote Long-Term Care Insurance for the Elderly

In May 1993 the state of Indiana implemented the Indiana Long Term Care Program (ILTCP, or partnership program). This was a public-private partnership to finance long-term care. ILTCP provides one dollar of asset protection for each dollar paid out by the purchaser's insurance policy (known as partnership policies).

Once the insurance has paid benefits in an amount equal to remaining assets, the purchaser may apply for Medicaid to help pay for continuing long-term care without having to spend down the protected assets.

The project was part of the Robert Wood Johnson Foundation's (RWJF) national Program to Promote Long-Term Care Insurance for the Elderly.

Key Results: Policy sales have been lower than expected, due chiefly, according to the project director, to the policy's high price (compared with other, nonpartnership policies) and a lack of understanding and acceptance of ILTCP by insurance agents.

As of September 30, 2000, 12,641 policies were in effect, 58 people were eligible for benefits, seven had exhausted their benefits and four had accessed the state's Medicaid program.