Oregon Makes Plans for But Does Not Implement Lifetime Protection in Its Long-Term Care Insurance Program for the Elderly
The state of Oregon conducted planning for a private-public partnership for long-term care insurance.
The planning included a marketing and utilization survey of state public employees and retirees (the group targeted for a possible demonstration program), studies using Medicaid data on nursing home and home and community-based care, and development of criteria by which the state could judge case management systems.
The project was part of the Robert Wood Johnson Foundation's (RWJF) national Program to Promote Long-Term Care Insurance for the Elderly.
- Of all of the states involved in the planning phase, only Oregon was considering direct premium subsidies for the general population.
- However, as Oregon's plan evolved, it was clear that it would not automatically provide Medicaid or state coverage when the private insurance expired.
- The grantee institution did not pursue further RWJF support for program implementation.
RWJF supported the project with a grant of $286,513 from December 1988 to September 1990.
The Oregon Governor's Commission on Financing Long-Term Care, which was appointed in 1988, predicted that the great majority of Oregonians 60 to 75 percent would probably never be dependent on others for long-term care.
However, because of the increasing population of elderly individuals and the impossibility of predicting which individuals in that group would become dependent, the commission recommended a closer examination of the state's long-term care system.
In 1998, as part of the initiative established by the commission, Oregon applied to RWJF for a grant to plan a private-public partnership for long-term insurance.
The purpose of the grant was to define and, with actuarial consultation, determine the feasibility of creating an affordable, financially sound, marketable long-term care-insurance policy. The principal accomplishments of the project were:
- Establishment of the Robert Wood Johnson Grant Project Advisory Board to oversee the project.
- Development of criteria by which the state could judge case management systems.
- Creation of Oregon's Long-Term Care Benefits Package, which would serve as a standard for public-private partnerships benefits.
- Analysis of data concerning the use and cost of long-term care services in Oregon.
- Negotiation of a potential offering to state employees and retirees.
- Solicitation of insurer participation in a partnership program to be offered to public employees.
- Evaluation of the marketability of long-term care-insurance programs among different groups of consumers.
- Minimum amount of insurance required: not determined
- Minimum benefits: variable, based on patient's impairment. Monthly maximum benefit of $2,000 to $3,500; lifetime maximum equal to 60 times the monthly maximum benefit.
- Coverage after long-term care insurance expires: none
- Inflation adjustments: option of annual increase based on the consumer price index (CPI), up to a maximum of 5 percent a year
- Requirements for policyholders to begin receiving benefits: one of the following: (1) assistance with three ADLs or (2) dependency in two ADLs
- State subsidies: direct premium subsidies
Of all of the states involved in the planning phase of the program, only Oregon was considering direct premium subsidies for the general population. The state was also considering offering a tax credit to those who bought approved long-term care-insurance policies. Another unique feature was its plan to segment the risk for long-term care costs into coverage for noninstitutional benefits (for which the state would be responsible) and institutional benefits (for which insurers would be responsible).
The Oregon plan also had a focus on cost-effective community-based care that was designed to reduce the number of beneficiaries who spend down their assets and end up on Medicaid. Because of this focus, the state's partnership was not going to include the automatic provision of Medicaid and asset protection upon the expiration of private insurance.
While Oregon did not meet the goal of providing a long-term care-insurance plan that offered lifetime protection, the state was able to outline a public-private partnership model for how private insurers and the state can combine their resources to offer a product that was significantly better than what was on the market at that time. The grantee institution did not pursue further RWJF support for program implementation. However, the project director credits the project with helping the state focus on the long-term care model that the state wanted to promote, which featured payment levels geared to the level of impairment, opportunities for client choice, improved case management, and inflation protection.
Project staff wrote one journal article and one report based on the project and made four presentations. All products predated 1995 the cutoff date for Bibliography in this report.
AFTER THE GRANT
The Omnibus Budget Reconciliation Act of 1993 contained language with direct impact on the expansion of partnerships for long-term care to any states other than the four initial program states California, Connecticut, Indiana and New York plus a future program in Iowa and a modified program in Massachusetts.
These six states were allowed to operate their partnerships as planned because their state plan amendments had beenapproved by the Department of Health and Human Services before OBRA 1993 went into effect. The rest of the states, including Oregon, were prohibited from doing so.
New Federal Legislation Expands the Model
In the spring of 2006, President George W. Bush signed legislation that was part of a larger budget-cutting measure that allows the long-term care insurance partnership model to be used in all 50 states. Besides increasing the incentives to purchase long-term care insurance, the bill made it harder for seniors to give away money and property before asking Medicaid to pick up their nursing home tabs.
Mark Meiners said he hoped the nationwide clearance for the programs will help spur interest in consumers to buy coverage and in insurers to offer it.
GRANT DETAILS & CONTACT INFORMATION
Oregon Program to Promote Long-Term Care Insurance for the Elderly
State of Oregon Department of Human Resources Senior Services Division (Salem, OR)
Dates: December 1988 to September 1990
Robert S. Zeigen, Ph.D.
Report prepared by: Robert Crum
Reviewed by: Marian Bass
Reviewed by: Molly McKaughan
Program Officer: Stephen Somers
Program Officer: Pamela Dickson
Program Officer: Nancy Barrand
Program Officer: Andrea Gerstenberger
Evaluation Officer: Joel Cantor
Evaluation Officer: James Knickman