This paper uses a new microsimulation model to evaluate policy alternatives designed to address present and future long-term care financing issues. Using this model, we evaluate the expansion of Medicare to include a long-term care benefit, an individual mandate to purchase private long-term care insurance, tax deductions and credits to encourage voluntary purchase of long-term care insurance, and changes to the Medicaid program to reduce states' burdens in funding long-term care. Because of their disproportionate need for long-term care services, the findings are most relevant for the elderly.
There are two main findings: (1) The demand for and the burden of financing long-term care depends on many factors, not just demographics and economics. (2) Few long-term care policy options reduce overall costs to government relative to the status quo. Despite this, several options have merit on other grounds: increasing financial independence and dignity by reducing reliance on Medicaid; fulfilling unmet need by providing affordable long-term care insurance coverage; increasing financial stability by changing the funding structure of long-term care; increasing care coordination by integrating acute and long-term care for the elderly and disabled at the federal level.
Our results suggest that there is much to be gained by long-term care policy change but there are limits to what policy can do. Demand for and the overall cost of long-term care is likely to increase in the future regardless of policy change. However, some policy alternatives can increase our capacity to handle these changes and simultaneously achieve other worthwhile healthcare goals.
Learning Objectives: N/A
Keywords: Long-Term Care, Fiscal Policy
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: (1) American Health Care Association, (2) Abt Associates Inc.
I have a significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.
Relationship: (1) The American Health Care Association sponsored the work I will be discussing. (2) I am an employee of Abt Associates Inc. where this work was conducted.