Panel Eyes Public Funding Options For LTC

WASHINGTON – A bipartisan think tank formed by congressional elder statesmen wants to help head off the coming long-term care funding crisis. So these elder statesmen will propose a series of policy options designed to help Congress craft legislation to deal with the increasing costs of care for a population that is living longer.

The Bipartisan Policy Center (BPC) has been involved in this issue since 2013, and their involvement was mentioned during a recent Genworth webinar on the cost of long-term care. During that webinar, Genworth officials disclosed that they have been working with and supporting the BPC in its effort to generate bipartisan guidelines Congress can use to craft a politically-viable alternative to the CLASS Act, a provision of the Affordable Care Act that became a political pariah and ultimately was repealed.

During the webinar, Genworth president and CEO Tom McInerney warned that if people don’t take the time to plan for long-term care with their families, there will be tremendous pressure on Medicaid programs from a public policy perspective. “I think it has enormous negative consequences,” he said.

And in an article this week on Genworth’s annual “Cost of Care” survey, The Wall Street Journal said that long-term care insurance has become “a cause for concern” as premiums increase and fewer insurers offer the policies.

The BPC’s members include former U.S. Senate Majority Leaders Tom Daschle, D-S.D., and William Frist, R-Tenn., as well as former Congressional Budget Office Director Alice Rivlin, and former Wisconsin Governor and Secretary of Health and Human Services Tommy Thompson.

In late 2015, BPC’s Long-Term Care Initiative will propose a series of bipartisan policy options to improve the quality and efficiency of publicly and privately financed long-term services and supports (LTSS) at a time of political discord and fiscal constraints, said Joann E. Donnellan, BPC senior advisor/communications.

Congress first tried to tackle the issue in 2010, as the Community Living Assistance Services and Supports (CLASS Act) provision of the ACA. The provision would have created a national, voluntary insurance program for purchasing community living services and supports designed to expand options for people who become functionally disabled and require long-term help.

However, in the heightened political atmosphere that surrounded the ACA, the CLASS Act was derided as potentially too expensive and unworkable. It was repealed in early 2013 in an omnibus budget act after effectively being abandoned by the Obama administration.

During the Genworth webinar, McInerney warned that 25-50 percent of Medicaid costs are paid for long-term care currently. “And that’s before the baby boomers, who are turning 65 - 10,000 a day. In another 12 years, they’ll be turning 80, maybe it won’t be 10,000 a day, but it will be not too far behind.”

McInerney predicted that, “There will be tremendous pressure on Medicaid programs and without people having decisions with their families, having a plan from a public policy perspective.  I think it has enormous negative consequences.”

Dr.  Edward Schneider, Dean Emeritus of the Leonard Davis School of Gerontology at the University of Southern California and a consultant to Genworth, added that “it is critical” that Congress deal with the issue.

“I think the United States is about 15 or 20 years away from being in as much trouble as Europe is in around these social issues,” Schneider said.

He added that “the millennials are going to be the payers ultimately for LTC for the growing aging population” and implied there will be a strong reaction from younger voters against the high cost of care for the elderly.

McInerney said that he has talked to BPC officials, and he believes that they are “going to come out with some very strong recommendations,” centering on what the government should be doing, including “working with the private sector to educate the public more.”

He predicted the study will propose that federal and state governments can provide more incentive for people to prepare for retirement and the potential need for LTC.

“Whether it’s using tax breaks, using 401(k) pre-tax dollars, all kinds of things are out there,” McInerney said.

InsuranceNewsNet Washington Bureau Chief Arthur D. Postal has covered regulatory and legislative issues for more than 30 years. He can be reached at [email protected].

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Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].