New York Program to Promote Long-Term Care Insurance for the Elderly Offers Full Asset Protection in Exchange for Mandatory Insurance
The New York State Partnership for Long-Term Care (NYSP) was implemented in April 1993. Called the partnership program, New York's total-assets protection model requires a three-year policy for nursing home care and a six-year policy for home care or some combination thereof and Medicaid extended coverage once the private insurance benefit expires, with total-asset protection.
The project was part of the Robert Wood Johnson Foundation's (RWJF) national Program to Promote Long-Term Care Insurance for the Elderly.
As of mid-2000, 27,903 NYSP policies were in effect (representing an increase of 197 percent over four years), and 14 insurers were participating in the partnership program.
RWJF provided $320,730 for planning, $2,044,017 for implementation, and $407,697 for communications.
In 1984 New York's Long Term Care Policy Coordinating Council concluded that the state should develop its own plan for the financing of long-term care and should challenge the federal government and the private insurance sector to participate in its financing. By 1986 Medicaid was paying for 82 percent of patient days in residential health care facilities in the state at a cost of $2.2 billion. With no significant changes in the system of financing and service delivery, the costs of long-term care in New York's Medicaid program were projected to increase to $23.5 billion by 2010.
RWJF grants were originally awarded to the New York Department of Social Services. Due to administrative changes in the New York state agencies, the grants were subsequently administered by Health Research, Inc., an organization that administers state public health grants. In addition, Bobbie Bowden Communications, a Schenectady, N.Y., public relations firm, was funded by RWJF to assist in a publicity campaign for NYSP.
Prior to and during the planning and implementation grant periods, the grantee institutions accomplished the following:
- Established the Governor's Long-Term Care Policy Coordinating Council in 1985 to discuss reform of the financing and delivery of long-term care.
- Built consensus for the public-private partnership for long-term care through a focus on decision-making within the relevant agencies, a focus on input from the insurance industry, and a focus on keeping state personnel and legislators informed.
- Established two steering boards to oversee project operations, and two advisory groups to provide various feedback to the program, as follows:
- The Strategy Board consisting of representatives from the New York State Departments of Social Services, Health, and Insurance; the Office of Aging; the Division of Budget; the Governor's Office of Employee Relations; and participating insurers met regularly to discuss operational, policy, and other issues concerning development of the Partnership Program.
- The Evolution Board, which currently governs the Partnership Program, meets quarterly to discuss operational issues and to develop new Partnership products.
- The Advisory Group consisting of representatives of the provider, consumer, and insurance communities was invited by the partnership to inform and discuss the program (it met once in 1990).
- The Legislative Advisory Group, consisting of legislative staffers, met to provide input concerning the legislative process as it related to the Partnership Program. This group disbanded in 1994.
- Collected and analyzed data pertaining to long-term care in New York. The data analysis strategy focused on the state's Medicaid data, administrative and financial/discharge records of nursing homes, the 1980 census, the Current Population Surveys, and Medicaid patient review instruments. The project staff also conducted primary data collection in nursing homes to try to determine estimated Medicaid spend-down patterns and lengths of stay, terming these "fiscal lengths of stay".
- Designed a conceptual model of public-private partnership for long-term care insurance, known as the total-assets protection model.
- Entered into negotiations with insurers on offering policies based on the NYSP model.
- Implemented the NYSP in February 1993; policies were sold beginning in April 1993. The occasion was marked with a gubernatorial press conference.
- Conducted a statewide education and publicity campaign for NYSP. With the assistance of Bobbie Bowden Communications, the effort included print, radio, and television coverage; a consumer information booklet and pamphlet; three informational videotapes featuring actress Celeste Holm; in-person and media presentations and hearings for potential consumers, Elder Law attorneys, and groups of financial planning professionals; and pro bono promotional appearances by Ms. Holm. The NYSP also developed a Web site www.nyspltc.org as a key focus of NYSP agent support, public education efforts, and information dissemination.
- Established a database for receiving quarterly data from insurers, editing the data, incorporating the data into the UDS, and using the data to generate meaningful management reports, including a quarterly statistical report.
- Conducted outreach and educational activities for insurance agents via seminars and a quarterly newsletter.
- Initiated an evaluation of NYSP and the publicity campaign. Results from the evaluation may lead to modifications in the program to make it conform more closely to industry standards and to address consumer choice by increasing benefit flexibility.
The following description of benefits is based on the most current information available.
- Minimum amount of insurance required: three years for nursing homes; or six years for home care, where two home care days equal one nursing home day; or a combination of the two.
- Minimum benefits in 2000: $141 per day for nursing home, $70 per/day for home and community-based services including assisted living.
- Coverage after long-term care insurance expires: Medicaid Extended Coverage is available when insurance expires, with total-asset protection.
- Inflation adjustments: increases of 5 percent compounded annually. (Previous adjustments are figured into successive adjustments.) The 5 percent compound inflation protection is mandatory for persons age 79 and younger at the time of purchase.
- Requirements for policyholders to begin receiving benefits: disability equivalent to 11 categories of the state's Resource Utilization Group system (similar to ADLs criteria), or disability levels per the federal Health Insurance Portability and Accountability Act guidelines, for policies issued on or after January 1, 1997.
- State subsidies: none
New York's Partnership for Long-Term Care differs from partnerships in other states in that New York does not require the purchase of varying amounts of insurance coverage depending on a person's level of income or assets. Policyholders would have all assets protected under this plan. The underlying logic of NYSP's total-assets protection model is that the period of insurance exceeds the average length of stay of 2.5 years, which at New York long term care costs, could consume middle income New Yorkers' life savings. Therefore, the three-year period of coverage was designed to protect assets, yet save Medicaid substantial amounts, in a state where the average time to spend down to Medicaid eligibility is 910 months. The cost-benefit of a total asset protection incentive was feasible, given the predominance of Medicaid payment for long term care, in a state environment with liberal rules governing asset transfer and Medicaid eligibility.
As of mid-2000, 27,903 NYSP policies were in effect (representing an increase of 197 percent over the past four years), and 14 insurers were participating in the partnership.
During the 10-year term of these grants, project staff published three project-based reports, three journal articles, three brochures, and one newsletter. Project staff also convened 12 meetings, the majority of which were designed to train agents. Some 10 informational videotapes were produced, including several featuring pro bono promotional appearances by actress Celeste Holm. Approximately 160 articles in mass-media print outlets mentioned or featured NYSP, including The New York Times and Newsday, along with 11 radio or television spots. Detailed information concerning NYSP can also be found on the program's Web site www.nyspltc.org. (See the Bibliography for details.)
- Planning staff must provide incentives for both the public and private sides so that all parties can feel as though they are benefiting from the planning process.
AFTER THE GRANT
New York, along with Connecticut, California and Indiana, continues to offer the specially tailored long-term insurance policies.
The partnership programs have saved the four states $8 million to $10 million in health care bills, plus it allows them to be more assertive in prodding people to get long-term care insurance because the policies are more affordable, said Mark Meiners, the director for the Center for Health Policy, Research and Ethics at George Mason University and an architect of the partnership program.
OBRA 1993's Effect on the Model
The Omnibus Budget Reconciliation Act of 1993 contained language with direct impact on the expansion of partnerships for long-term care to other states. The Act recognized the four initial states, 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 been approved by the Department of Health and Human Services before OBRA 1993 went into effect. The remaining states 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
New York Program to Promote Long-Term Care Insurance for the Elderly
State of New York Department of Social Services (Albany, NY)
- Planning Grant
Amount: $ 320,730
Dates: April 1988 to December 1989
- Implementation Grant
Amount: $ 1,660,913
Dates: January 1990 to June 1994
Health Research, Inc. (Albany, NY)
- Implementation Grant
Amount: $ 383,104
Dates: September 1997 to August 1999
Ann Clemency Kohler
Bobbie Bowden Communications (Schenectady, NY)
- Communications Grant
Amount: $ 59,919
Dates: May 1994 to April 1994
- Communications Grant
Amount: $ 68,778
Dates: May 1994 to April 1995
- Communications Support for the New York State Project
Amount: $ 279,000
Dates: July 1995 to June 1998
(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)
Books and Reports
Project staff. Annual Report 1997. 5 (January 1, 1997 December 31, 1997). Albany, NY: Office of Continuing Care, New York State Department of Health, 1998. 75 copies distributed to date.
Project staff. Quarterly Update. 6:1 (January 1, 1998 March 31, 1998). Albany, NY: Office of Continuing Care, New York State Department of Health, 1998. Approximately 100 copies distributed to date.
Project staff. Quarterly Update. 6:2 (April 1, 1998 June 30, 1998). Albany, NY: Office of Continuing Care, New York State Department of Health, 1998. Approximately 75 copies distributed to date.
"Private LTC Insurance: A New Sub-Specialty of Elder Law," New York State Bar Journal (Albany, NY).
Holubinka GE. "Issues on Aging: The New York State Partnership for Long-Term Care: A New Option for Dignity and Financial Control." Vim and Vigor, 11:2 (Summer 1995).
Holubinka GE, Belardi GJ, Takada HA and Nussbaum SI. The Partnership Experience: Considerations in State Planning. Unpublished.
Brochures and Fact Sheets
"Agent Packet: Guidelines, Ideas, Forms, and Other Tools to Help You Market Your Partnership Products." New York State Partnership for Long-Term Care, 199598 (continuous updates).
The Partnership Press. Albany, NY: New York State Partnership for Long-Term Care. 7 issues from 1995 to 1998. Approximately 8,000 copies produced and distributed.
"Health Insurance Information Counseling and Assistance Program Training Workshop," September 8, 1997, Binghamton, NY. Attended by 50 individuals from such organizations as the Health Insurance Information, Counseling and Assistance Program; the New York State Office for the Aging; the New York State Insurance Department;, and Blue Shield of New York.
"Long Term Care Forum," October 27, 1997, Syracuse, NY. Attended by 400+ insurance agents and financial planners. One presentation was made:
- Gregory Belardi, "The NYS Partnership for Long-Term Care: A Public-Private Financing Alternative for Long Term Care."
Presentations and Testimony
Gregory J. Belardi, "Public-Private Partnerships: Successes and Challenges" and "The Partnership for Long Term Care: A New York Update," at the Riding the Wave of Change to New Opportunities the 12th Annual Private Long Term Care Insurance Conference, November 35, 1997, Coronado, CA.
Gregory J. Belardi, "The New York State Partnership for Long-Term Care: A Consideration in Retirement Planning," at the Estate Planning Council of Eastern New York Winter Meeting, January 14, 1998, Loudonville, NY.
Gregory J. Belardi, "The New York State Partnership for Long-Term Care," at the Community Alternative Systems Agency (CASA) Association of New York Winter Meeting, February 6, 1998, Albany, NY.
Gaurang Trivedi, "The New York State Partnership for Long-Term Care: An Innovative Way to Plan for Your Future Needs," at the Legislator's Health Insurance and Retirement Forum, May 1998, Long Island, NY. Project staff, "Agent Roundtables Discussion," May 12, 1998, Melville, NY.
World Wide Web Sites
www.nyspltc.org provides information related to the New York State Partnership for Long-Term Care. Albany, NY: New York State Partnership for Long-Term Care, Office of Continuing Care, NYS Department of Health, 199798.
Audio-Visuals and Computer Software
Ensure Your Future, a 30-second videotape for commercial and public service announcement. Summer 1998.
For Your Children: The NYS Partnership for Long-Term Care, a 60-second videotape for commercial and public service announcement. Summer 1998.
Piggy Bank, a 30-second videotape for television advertisement. Schenectady, NY: Bowden & Light Associates, 1997.
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