Financing long-term services and supports: challenges, goals, and needed reforms

ABSTRACT

The need for long-term services and supports (LTSS) presents a growing financial burden on disabled individuals, their families, and state Medicaid budgets. Strategies for addressing this problem pose both a policy design and a political challenge. This article begins by explaining the choices and trade-offs policy makers face in designing new policy and offers the outlines of a specific approach to navigating these. It then concludes with an assessment of current LTSS policy directions and politics—specifically, the movement to constrain, rather than enhance, federal financing for LTSS and the counterpressures necessary to strengthen meaningful insurance protection. While the political environment has become even less conducive to expansion of public benefits, the underlying problem of LTSS financing will grow and persist. And politics change. Thus, in this paper we offer and explain the choices we would make to bridge the political divide—specifically, a proposal to develop a new public–private partnership based on a public program to cover “back-end” or catastrophic costs plus measures making private insurance more attractive for the “up-front” risk, an approach that has recently been endorsed by a number of bipartisan groups.

KEYWORDS:

• Long-term care financing
• long-term care insurance
• catastrophic coverage for LTSS