Posted on Monday, June 6, 2016 1:00 PM

The Urban Institute published a summary funded by the SCAN Foundation that analyzes opportunities for improving financing for long-term services and supports (LTSS).

According to the brief, about half of the people aged 65 will need a significant amount of LTSS. With several factors put into consideration for those individuals, they will either receive services from paid caregivers or end up in a nursing home.

“As the population ages and LTSS costs rise, there is growing concern that Medicaid will increasingly strain federal and state budgets (Commission on Long-Term Care 2013),” the Urban Institute stated in the report. “Although exact estimates vary, Medicaid pays more than $100 billion a year for LTSS, covering between 40 and 60 percent of the nation’s LTSS costs (Congressional Budget Office 2013; Kaiser Family Foundation 2013; O’Shaughnessy 2014). The Congressional Budget Office (2015) projects that between 2015 and 2040, total Medicaid spending as a share of gross domestic product will rise from 2.2 to 2.9 percent.”

The brief stated that “new LTSS insurance programs could provide better financial protection to people with disabilities; improve the care they receive; and reduce Medicaid costs.”

The Urban Institute modeled the following program options to include front-end benefits and catastrophic benefits:
• The front-end plan would benefit after the first 90 days of need and continue coverage for up to two years
• Under the catastrophic plan, insurance would be available after two years but would then continue indefinitely, resulting in consumers responsible for the first two years of expenses

The Urban Institute discovered that the front-end option “would reduce family out-of-pocket spending more than the catastrophic option, whereas the catastrophic option would reduce Medicaid spending more.”

For the full article, click here.

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