Value in Long-Term Care Insurance Policies
An analysis of long-term care insurance (LTCi) policies purchased between 1995 and 2005 estimates that nearly $800 billion in benefit value is available. Further, buyers’ financial profile has shifted over time with purchasers in the 1990s at greater risk of spending down to Medicaid eligibility absent LTCi than more recent purchasers.
LTCi promises over 7 million policyholders benefit payments for long-term services and supports (LTSS), but potential insolvencies in the marketplace threaten the financial value of policies currently in force. With support from the Elevance Health Public Policy Institute, ATI Advisory and LeadingAge LTSS Center @UMass Boston analyzed data on private LTCi policyholders who purchased policies between 1995 and 2005. The study quantifies national and state-level in force policy value, buyer demographics, and the likelihood of buyers’ Medicaid eligibility in the absence of their LTCi policy.
The findings highlight the importance of policy and regulatory approaches that preserve LTCi benefit value and protect the financial resources of states and consumers.
Related Public Policy Research
Protecting Consumers and Medicaid from Catastrophic Long-Term Care Costs
States can reduce LTC insurance insolvency risks by adopting the NAIC’s Guaranty Fund Model Act and considering other policy options to protect consumers and Medicaid.
Improving State Guaranty Funds Can Strengthen Consumer Protections and Market Stability
State guaranty funds can be improved by expanding the base of health insurers that contribute to the funds and equalizing the burden shared between life and health insurance companies.
Coordinating Medicaid Long-Term Services and Supports
MCOs deliver coordinated, high-quality LTSS that promotes self-direction and helps individuals remain in their homes, live independently, and engage meaningfully in their communities.