Mandatory LTC Insurance Proposed as Possible Solution to Aging Crisis

A Wednesday Senate hearing on the future of long-term care and how to pay for it raised questions and policy suggestions but provided no definitive solutions for what many have called a looming crisis.

One such suggestion was to require individuals to participate in a long-term care insurance program, similar to how the Affordable Care Act has structured regular health insurance participation by including an individual mandate.

There are currently around 12 million Americans with long-term care needs, Senator Bill Nelson (D-Fla.), Chairman of the Special Committee on Aging, said during the hearing, and that number is rising rapidly.


But few have the forethought to purchase a long-term care insurance policy, and many instead rely on unpaid family caregiving, which the Congressional Budget Office values at roughly $234 billion annually.

“Despite these enormous costs, most Americans have done little or nothing to prepare for their long-term care needs, according to a recent study from The SCAN Foundation,” Nelson said, adding that the current long-term care system is “unsustainable for both the government and families.”

Long-term care is the “major catastrophic health expense” faced by older Americans today, said Senator Susan Collins (R-Maine), ranking member of the Special Committee on Aging, during the hearing.


“These costs will only increase as our nation ages,” she added, especially as the number of the “oldest old”—those aged 85 and above—is the fastest growing segment in the United States population and is simultaneously the most at risk of having multiple health problems that can lead to disability and the need for long-term care.

There’s clearly a need for access to affordable long-term care, said Judy Feder, PhD, a professor at Georgetown University’s McCourt School of Public Policy and Fellow at the Urban Institute.

“Families can only do so much,” she said. When people need paid care, she continued, whether at home or in an assisted living community or in nursing homes, the costs usually rise above the ability to pay.

Her suggestion: establish a “viable insurance mechanism” that could be public, private, or some combination of the two. Feder leans toward a public social insurance model where private insurance can play a complementary role, noting that in order to effectively spread risk and reach the broadest possible population, mandatory participation would be needed.

That’s similar to what Anne Tumlinson, MMHS, senior vice president of Avalere Health, said during her testimony.

“Even when people are educated about the risks of long-term care and are presented with long-term care insurance policies, we will not truly address financing without requiring everyone to participate,” she said.

While neither senator on the special committee endorsed the individual mandate route to long-term care insurance, both did acknowledge that people need to change their attitudes about how they’ll finance their future care.

“Americans should consider their future long-term care needs,” Collins said, “just as they prepare for retirement or purchase life insurance.”

Written by Alyssa Gerace