Universal Long-Term Care Insurance Proposed by Financing Experts

There’s no doubt that long-term care financing poses serious challenges, and how to institute comprehensive reforms that expand services and make senior housing and other options more accessible is still up in the air.

One group has set out to find those reforms and recently published its first consensus report with recommendations to shift financing methods to provide universal, affordable coverage for all Americans.

The Long-Term Care Financing Collaborative (LTCFC), a group of policy experts that was created in 2012 to develop recommendations to improve the long-term care services and supports (LTSS) systems, has released a consensus framework for long-term care financing reform. LTCFC is an initiative from Convergence, a non-profit organization that collaborates on solving social challenges.


The collaborative is seeking “21st century financing for 21st century lives,” some members of the collaborative said during a press conference via webcast on February 22. The report does not outline any specific policy recommendation, or even many hard details, but it does provide a consensus that could help boost support for these types of services and make options more clear to the consumer.

Universal—and Mandatory—Coverage

Parts of the report recommend shifting some of the reach of LTSS to community- and home-based settings, but opening up LTC insurance options could potentially enable more Americans to afford senior living options.


Create a new universal catastrophic long-term care insurance program. Arguably the most revolutionary idea in the report, a new program that covers catastrophic events would shift the long-term care burden away from welfare-based programs like Medicaid and make private insurance coverage more affordable.

The mandatory program would provide protection for catastrophic risk—based on income eligibility levels—after two or three years as a “solid base” to help pay for long-term care expenses. The report recommends a “strong government role” in expanding protections through a universal program.

To provide clear private and public roles for long-term care financing. Members of the collaborative said during the webcast Monday that one of the biggest challenges the long-term care market currently faces is a lack of a divide between where the public burden begins and the private market ends. The new universal catastrophic program would enable a clear distinction between the public and private market to take shape.

Redefine Medicaid LTSS. Modernizing Medicaid—which one member called “the bastard child of 1965”—is a priority for reforming long-term care financing. The collaboration recommends more flexible public programs that offer more choices for Americans to receive services in more care settings. Currently, the income incentives to receive LTSS from Medicaid are so limiting

Lower private insurance costs. One common reason more Americans don’t own private long-term care insurance is the high cost and a lack of understanding of what other public and private insurance policies may cover. By shifting to a universal catastrophic program, private insurance may become cheaper for long-term care services and encourage more companies to offer these products.

“The most costly approach is doing nothing,” Don Redfoot, a consultant on the collaborative who formerly served as a senior strategic policy advisors with AARP’s Public Policy Institute, said during the press conference.

Increase retirement savings and improve public outreach. Creating a new program and more clearly defining coverage within private and public programs will better enable Americans to understand their care options for the future. Stronger support for these services within homes and communities will lead to better integration and better health outcomes and lower costs. The report noted that about half of all seniors will need, at some point, a high level of personal assistance that typically costs $140,000 per year on average.

“Right now, there is enormous confusion on the part of consumers on long-term care insurance,” Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center at the Urban Institute and member of the collaborative, said during the press conference Monday. “The first thing we need to do is make this delineation much sharper so people are really clear what is available to them and what is not.”

Written by Amy Baxter

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