In a new study, a Hartford-based think tank says the state must act now to get more residents on long-term care insurance, before their care requirements overwhelm existing Medicaid programs.
The report was issued by the Yankee Institute for Public Policy, which among other issues has advocated a repeal of Connecticut”™s income tax. The lead author is Redding resident Lewis Andrews, the organization”™s executive director who is a past research fellow at Yale University.
“Aging baby boomers represent a massive uptick in (long-term care) demand, expected to test the limits of Medicaid in the decades to come,” Andrews said, in a statement following the report”™s release. “This is especially true in Connecticut because of the state”™s disproportionate number of older citizens, due to a tax policy that chases away businesses and younger employees along with them.”
Long-term care insurance is sold to cover expenses for elderly people who require temporary or ongoing care, allowing them to avoid dipping into whatever retirement assets they possess.
According to the state, the number of Connecticut residents who require long-term care insurance is expected to jump from 188,000 in 2006 to 240,000 by 2030.
In an effort to increase the number of people who have the insurance, the state created the Connecticut Partnership for Long Term Care in 1992, one of four initial states to create such a program. For each dollar purchased in an approved long-term care policy, one additional dollar is exempt against future Medicaid costs for up to $200,000 in protected assets.
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In addition, nursing homes are required to offer plan participants a 5 percent discount.
Connecticut has been in negotiations for reciprocal arrangements with New York and California to allow residents to carry their policies with them if they move to those states.
At last count, 10 insurance carriers participated in the program. Through 2007, the partnership had generated 46,000 policies with a median benefit of $219,000. Policyholders are 58 years old on average and 56 percent are women. Just 45 percent of purchasers had an average monthly income of more than $5,000.
The Yankee Institute recommends:
Ӣ policymakers reform Medicaid eligibility to prevent overuse by those for whom it is not intended;
Ӣ insurance companies should better promote long-term care insurance; and
Ӣ more use of so-called reverse mortgages to free up cash for seniors while allowing them to remain in their homes