Long-Term Care Insurance: Proposals To Link Private Insurance and Medicaid Need Close Scrutiny

GAO discussed proposed state demonstration projects that would coordinate private long-term care insurance with Medicaid to finance long-term care costs. GAO noted that: (1) the projects could significantly reduce the financial hardships that some elderly endure as a result of catastrophic long-term care costs; (2) the government would benefit if middle-income elderly no longer relied on Medicaid for assistance in paying for extended long-term care services; and (3) less than 20 percent of persons between the ages of 65 and 79 could afford long-term care insurance policies. GAO believes that: (1) the state demonstration projects could provide a key source of information on participants' use of long-term care services; (2) states should ensure that consumers understand any risks associated with the policies offered under private long-term care insurance; and (3) legislation should stipulate that states and insurers agree to collect sufficient data and share all research and tracking data on program participants.