Long-Term Care Partnership: Protecting Consumers and States from Catastrophic Expenditures

1. Long-Term Care Partnership: Protecting Consumers and States from Catastrophic Expenditures State Coverage Initiatives Winter Meeting February 8, 2008 Chad Shearer Program Officer, CHCS

2. About CHCS • Our Mission • To improve health care quality for low-income children and adults, people with chronic illnesses and disabilities, frail elders, and racially and ethnically diverse populations experiencing disparities in care. • Our Priorities • Advancing Health Care Quality and Cost-Effectiveness • Reducing Racial and Ethnic Disparities • Integrating Care for People with Complex and Special Needs • Our National Reach • 48 states • 160+ health plans

3. Aging boomers High probability of needing nursing home services High cost of long-term care services Medicaid: Largest payer for nursing home services Long-term care is substantial portion of Medicaid spending Background Source: Centers for Medicare & Medicaid Services (CMS), National Health Expenditures

4. LTC Partnership History • Robert Wood Johnson Foundation (Late 1980s) • States and insurers collaborate on long-term care insurance product for those who might otherwise rely on Medicaid to finance LTC. • Four states implement programs (Early 1990s) • California, Indiana, New York, Connecticut • Moratorium on new Partnership programs (1993) • 4 original states allowed to continue

5. Partnership Benefits • Asset Protection – If Partnership policies do not sufficiently cover the cost of LTC, beneficiaries may qualify for Medicaid while retaining a level of assets that would otherwise preclude them from eligibility. • Attract middle-income consumers who might not otherwise purchase LTC insurance. • Medicaid budget protection – GAO reported mixed results but original states and growth suggest budget benefit. • Only a small portion of policy holders exhaust their private benefits

6. Partnership Resurgence • Deficit Reduction Act (DRA) of 2005 • Eliminated moratorium on Partnerships • Rules for new Partnerships • Approved Medicaid State Plan Amendment (SPA) • Consumer Protections – NAIC Model Act & Regulations • Asset Protection – Dollar for dollar protection • Inflation Protection – Depending on age of purchaser • Original Partnership states deemed to have satisfied new requirements

7. Partnership Expansion

8. CHCS/RWJF Initiative • Long Term Care Partnership Expansion • Seed funding to 10 states developing partnership programs: • Arkansas, Colorado, Georgia, Michigan, Minnesota, Ohio, Oklahoma, South Dakota, Texas, Virginia • 3 states operational, 3 with approved SPAs • Technical Assistance • Policy Briefs • In-Person Meetings

9. Partnership Issues • States implementing or considering partnerships must consider: • Inflation protection • Agent Training • Policy Exchange • Reciprocity • Reporting Requirements • Medicaid Eligibility Determinations • Cost Effectiveness • Outreach

10. Contact/Resources CHCS – www.chcs.org – (609) 528-8400 Chad Shearer – cshearer@chcs.org Joanie Rothstein – jrothstein@chcs.org • Long Term Care Partnership Program Technical Assistance Website - http://www.dehpg.net/LTCPartnership/ • Centers for Medicare & Medicaid Services (CMS) - http://www.cms.hhs.gov/DeficitReductionAct/09_LTCPartnerships.asp • National Association of Insurance Commissioners (NAIC) – www.naic.org • Long Term Care Group, Inc. - http://www.ltcg.com • Provider Groups Financing Reform Agenda - http://www.aqnhc.org/email/20080115_2.html