Sharing the burden: strategies for public and private long-term care insurance

The United states is engaged in a critically important and contentious debate on how to overhaul the health care system. The Clinton administration's call for major health care reform has brought national attention to solving the dual problems of uncontrolled cost increases and the lack of adequate health insurance. Although this debate focuses primarily on acute care, it is also about long-term care and about how to restructure the way that care is financed. Today the families of Americans suffering from chronic conditions that require long-term care either at home or in nursing homes often face financial catastrophe. With the ever-increasing elderly population the need to address long-term care financing is more crucial than ever. Sharing the Burden examines a wide range of financing approaches to reforming long-term care and the impacts each would have over the next twenty-five years. It tackles the central issue in the long-term care debate - the relative roles of the public and private sectors. The authors urge that private insurance be encouraged and predict that it will grow. Nevertheless, private insurance will probably play a modest role in financing nursing home and at-home care. For this reason, careful attention must also be given to reforming public programs. They recommend a strategy that includes expanded social insurance covering more at-home care and limited nursing home care, liberalized eligibility requirements for medicaid so that complete impoverishment is not required before benefits are given, and an enhanced role for private insurance to provide asset protection to the upper-middle-income and wealthy elderly. Using their original computer simulation model, theauthors examine the costs of various public and private initiatives and who would pay for them. They conclude that the best strategy for reforming long-term care is a mix of public and private initiatives and, within the public sector, a combination of social insurance and medicaid