Connecticut Partnership for Long‐Term Care

Abstract

To the Editor:–The recent editorial on the “Connecticut Partnership for Long-Term Care” (October 1992, Vol. 40, No. 10) did not do that program justice. Wiener and Hanley question whether it is appropriate to use the means-tested Medicaid program as a mechanism to protect the assets of middle and upper income elderly. They ignored the fact that elder-law attorneys specializing in Medicaid estate planning are doing just that and doing it in a way that is damaging to both the fiscal and philosophical integrity of Medicaid, a program meant for the poor. The Partnership Program, in contrast, offers a positive response to this problem. It requires people to contribute to the cost of care before becoming eligible for benefits and does not require impoverishment. The Partnership offers an important extra benefit that can help assure policy makers that the elderly have reasonable options for protecting themselves against impoverishment. With this assurance should come more aggressive action to close the loopholes that allow abuse of the Medicaid system. Another concern raised by Wiener and Hanley is whether the poverty protection incentive will work. They suggest that asset protection may not be important to consumers who purchase long-term care insurance while avoidance of Medicaid is important. Let's be clear, the poverty protection is a benefit over and above that offered by most long-term care insurance currently marketed. Only lifetime coverage can assure protection from poverty, and for the majority of people, especially those most at risk of spend-down, lifetime coverage is not affordable. With the Partnership, people get the additional peace of mind that if their insurance runs out, they will not have to spend all their remaining resources or resort to gaming the system before Medicaid will help. The intent of the program is not to preserve people's estates, though this could be what some participants may want. The intent is to give individuals the next best thing to their health, the chance to preserve some financial independence when faced with physical dependence. Furthermore, with insurance helping to pay the bill, more people can receive long-term care as private-pay patients. Increased private patient census paying higher rates than those of Medicaid should serve to improve care quality, not reduce it. Another concern raised by Wiener and Hanley is whether the incentive program is worth the risk of failure. In truth their real fear is that it might succeed and erode support for a social insurance approach. Clearly the participating states feel their efforts are worth the risk. The growth of the private long-term care insurance market has tapered off recently. The backing of the state and the details of the Partnership Program can serve to bolster confidence in long-term care insurance. The unique insurance policies will carry a stamp of approval from the states, indicating they have meet rigid state certification requirements. As part of the program, educational campaigns will increase awareness among elders and their families about the lack of protection and their financial options. Regulatory oversight is also being strengthened to help consumer confidence. All participating insurers will be required to provide the state with data for program monitoring. The data will be used for a variety of special studies, including analysis of underwriting rules, utilization patterns and insured event criteria. To be sure, the Partnership Program is not a panacea for reforming our long-term care financing system. Held to the standard of being at least budget-neutral, its accomplishments cannot easily compete with the promises embodied in universal coverage financed through new social insurance taxes. But if progress on long-term care is to be made, the Clinton administration will need support for manageable improvements to our long-term care system that fall short of social insurance. One such step would be an improved state-based, means-tested program for long-term care to replace Medicaid's role. The Partnership model and an improved means-tested long-term care program in the states would be mutually complementary. Improvements to the Medicaid program cannot be sustained unless affordable and appealing private financing options can serve to keep people from using those benefits unless it is as a legitimate last resort. The Partnership Program serves to mitigate concerns about means testing: that programs for the poor are poor programs because they lack broad based political support. By linking the Partnership incentive to Medicaid, the constituency for the means-tested program should be enhanced rather than eroded.