Executive: Private LTC Can Help Save Medicaid

Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee, opened the hearing by saying it "is about identifying problems and fixing them in order to maintain Medicaid as a strong safety net."

Ruddock talked about S. 1244, a bill that would provide a deduction for purchase of LTC coverage as well as provide a $3,000 tax credit for individuals with long term care needs and their caregivers. The bill has been introduced as H.R. 2682 in the House.By paying policyholders' nursing home bills == and by keeping policyholders out of nursing homes by paying for home- and community-based services == private LTC insurance could reduce Medicaid's institutional care expenditures by $40 billion a year, or about 30%, Ruddock said, citing ACLI research.

Ruddock also talked about the Partnerships for Long Term Care program, a pilot program developed by the Robert Wood Johnson Foundation, Princeton, N.J., that encourages consumers to buy high-quality LTC insurance by allowing those consumers to keep some assets and qualify for Medicaid LTC benefits if their private LTC benefits run out.

Partnership programs are operating in California, Connecticut, Indiana and New York.

"ACLI believes that some type of simplified uniform approach to the long term care partnership program that includes eligibility for benefits for any approved tax-qualified long term care policy, state reciprocity, dollar-for-dollar asset protection, uniform…annual reporting to a single repository, and consumer education can play an important role in encouraging the purchase of long term care insurance and help provide important savings to Medicaid," Ruddock said.