Policy Options for Public Long-term Care Insurance

CONTROVERSY surrounds the place of long-term care insurance as part of national health system reform and the nature of such insurance if it is to be part of the reform. Some groups, most notably those representing older adults, believe that the current financing system, which relies heavily on the Medicaid program, must be altered. Others would not modify present arrangements, at least in the short run. Under current law, individuals are eligible for nursing home benefits through Medicaid if they have few assets other than housing equity. The following proposals would markedly change these arrangements: The Pepper Commission1 recommends a universal insurance system for those sufficiently disabled, but limits benefits to an initial period of 3 months. After 3 months, nursing home residents would pay for everything, unless they are poor enough to qualify for coverage similar to the current Medicaid program. Analysts at the Brookings Institution2advocate expanding the