1. Long-Term Care Partnership: Protecting Consumers and States from Catastrophic Expenditures State Coverage Initiatives Winter Meeting February 8, 2008 Chad Shearer Program Officer, CHCS

2. About CHCS Our Mission To improve health care quality for low-income children and adults, people with chronic illnesses and disabilities, frail elders, and racially and ethnically diverse populations experiencing disparities in care. Our Priorities  Advancing Health Care Quality and Cost-Effectiveness  Reducing Racial and Ethnic Disparities  Integrating Care for People with Complex and Special Needs Our National Reach  48 states  160+ health plans

3. Background Aging boomers High probability of needing nursing home services High cost of long-term care services Medicaid: –Largest payer for nursing home services –Long-term care is substantial portion of Medicaid spending Source: Centers for Medicare & Medicaid Services (CMS), National Health Expenditures

4. LTC Partnership History Robert Wood Johnson Foundation (Late 1980s) –States and insurers collaborate on long-term care insurance product for those who might otherwise rely on Medicaid to finance LTC. Four states implement programs (Early 1990s) –California, Indiana, New York, Connecticut Moratorium on new Partnership programs (1993) –4 original states allowed to continue

5. Partnership Benefits Asset Protection – If Partnership policies do not sufficiently cover the cost of LTC, beneficiaries may qualify for Medicaid while retaining a level of assets that would otherwise preclude them from eligibility. –Attract middle-income consumers who might not otherwise purchase LTC insurance. Medicaid budget protection – GAO reported mixed results but original states and growth suggest budget benefit. –Only a small portion of policy holders exhaust their private benefits

6. Partnership Resurgence Deficit Reduction Act (DRA) of 2005 –Eliminated moratorium on Partnerships Rules for new Partnerships –Approved Medicaid State Plan Amendment (SPA) –Consumer Protections – NAIC Model Act & Regulations –Asset Protection – Dollar for dollar protection –Inflation Protection – Depending on age of purchaser Original Partnership states deemed to have satisfied new requirements

7. Partnership Expansion

8. CHCS/RWJF Initiative Long Term Care Partnership Expansion –Seed funding to 10 states developing partnership programs: Arkansas, Colorado, Georgia, Michigan, Minnesota, Ohio, Oklahoma, South Dakota, Texas, Virginia 3 states operational, 3 with approved SPAs –Technical Assistance –Policy Briefs –In-Person Meetings

9. Partnership Issues States implementing or considering partnerships must consider: –Inflation protection –Agent Training –Policy Exchange –Reciprocity –Reporting Requirements –Medicaid Eligibility Determinations –Cost Effectiveness –Outreach

10. Contact/Resources CHCS – www.chcs.org – (609) 528-8400 Chad Shearer – cshearer@chcs.org Joanie Rothstein – jrothstein@chcs.org Long Term Care Partnership Program Technical Assistance Website - http://www.dehpg.net/LTCPartnership/ Centers for Medicare & Medicaid Services (CMS) - http://www.cms.hhs.gov/DeficitReductionAct/09_LTCPartnerships.asp National Association of Insurance Commissioners (NAIC) – www.naic.org Long Term Care Group, Inc. - http://www.ltcg.com Provider Groups Financing Reform Agenda - http://www.aqnhc.org/email/20080115_2.html