National Governors Association Policy on Long Term Care

On June 1st, the National Governors association (www.nga.org) put out a policy paper on what they would like to see regarding Medicaid Reform. Here are some selected sections that really speak to Long-Term Care Issues:

16.2.2 Asset Policy. While Medicaid remains a vital source of long-term care coverage for many individuals who cannot receive that care elsewhere, there is growing concern that many individuals are utilizing Medicaid estate planners or other means in order to shelter or transfer assets and therefore qualify for Medicaid funded long-term care services. Medicaid reform must include changes that increase the penalties for inappropriate transfers, restrict the types of assets that can be transferred, and encourage reverse mortgages, as well as other policies that encourage individuals and their families to self-finance care rather than rely on Medicaid.

16.5 Slowing the Growth of Medicaid Long-Term Care. Medicaid has quietly over the years become the nation's largest payer of long-term care services, funding approximately 50 percent of all long-term care spending and nearly two-thirds of all nursing home residents. Several policies are needed to encourage greater reliance on long-term care insurance rather than Medicaid.

16.5.1 Tax Credits and Deductions for Long-Term Care Insurance. Tax credits and deductions for qualified long-term care insurance policies and the encouragement of public-private partnerships are likely to save money in the Medicaid program in the long-run, if not in the short-term.

16.5.2 Long-Term Care Partnerships. These partnerships, currently operated by four states, create incentives to purchase long-term care insurance by allowing consumers to access Medicaid and preserve their assets once the insurance policy has been depleted. The federal law restricting these partnerships to those four states should be repealed.

It couldn't be clearer - America needs long-term care insurance.