Long-term-care insurance partnership programs offer benefits that protect policyholders, but the programs wont likely result in Medicaid savings and may increase spending, the Government Accountability Office reported.
The GAO examined long-term-care partnership programs in California, Connecticut, Indiana and New York that allow people who purchase long-term-care insurance policies to exempt some of their personal assets from Medicaid eligibility requirements. The partnership programs are public-private arrangements between states and private long-term-care insurance carriers. The programs are intended to encourage individuals to purchase private coverage in order to avoid reliance on Medicaid.
About 80% of the surveyed partnership policyholders would have purchased traditional long-term-care insurance policies if partnership policies were not available, representing a potential cost to Medicaid, the report found.
GAOs review indicates that Medicaid may be spending more, not less, for the partnership program. At a time of scarce Medicaid resources and growing demand for long-term-care services, we cannot afford to waste a single penny, said Sen. Max Baucus (D-Mont.), who chairs the Senate Finance Committee.
Sen. Chuck Grassley (R-Iowa), the panels ranking member, also weighed in. The reports conclusion that the long-term-care partnership program wont likely save Medicaid money has drawn some criticism from the very states currently involved in the project, he said. A fundamental disagreement like that tells me that we need to analyze the question further, and Ill ask the (HHS) inspector general to do that.
While Medicaid may not save money from these partnerships, the negative impact to the program is likely to be small, the GAO concluded. -- by Jennifer Lubell