Program to Promote Long-Term Care Insurance for the Elderly

    • July 24, 2007

Field of Work: Financing long-term-care insurance for elderly people

Problem Synopsis: Concern about the financing of long-term care is based on a set of grim predictions: The population of chronically ill elderly will inevitably increase with the population growth of those older than age 80 and with medical advances that enable those with chronic diseases to survive longer. A number of commissions at the federal and state levels have defined the need for insurance for the growing number of elderly Americans who have or will develop chronic illnesses.

Synopsis of the Work: Authorized in 1987, the Program to Promote Long-Term Care Insurance for the Elderly (LTCI), a national program of the Robert Wood Johnson Foundation (RWJF), was charged with providing states with resources to plan and implement private/public partnerships (Partnership programs) that would join private, long-term care insurance with Medicaid to offer high-quality insurance protection against impoverishment from the costs of long-term care-including both nursing home care and/or home care.

Evaluation Findings

  • In March 1989 RWJF commissioned Laguna Research Associates, Inc., of San Francisco, Calif., to conduct an evaluation of the national program. Findings include:

    • By 2000, a total of 104,000 applications had been taken and more than 95,000 had been sold in the four program states-California, Connecticut, Indiana and New York.
    • More than 25,000 new applications were received for Partnership policies in 1999.
    • Program redesigns in Connecticut, Indiana and California have produced increases in applications received ranging from 324 percent to 540 percent, compared to similar time periods prior to those adjustments.
    • In New York, where total sales have been the largest in number, updates to its program model are being explored to further program goals. This progress was accomplished despite restrictive language embedded in the Omnibus Budget Reconciliation Act (OBRA) of 1993 effectively curtailed one of the program's goals: replicating the partnerships in other states.
    • State regulations that had been developed for partnership products represented a more rigorous regulatory model-specifying higher quality policies-than previously existed in the states for long-term care insurance policies.
    • More than 30 percent of those who purchased policies said they would not have purchased long-term care insurance without the partnership program.