More States Adopting RWJF "Paternerships" to Save Long-term Care Dollars

MORE STATES ADOPTING RWJF “PARTNERSHIPS” TO SAVE LONG-TERM CARE DOLLARS

Volume 28, Issue 495 July 9, 2007

Anna Wolke

In an effort to restrain climbing Medicaid expenditures, a growing number of states are encouraging individuals to buy private long-term care insurance, according to a new issue brief from the Alliance for Health Reform. Their tool: the Long-Term Care Partnership program that was initiated by The Robert Wood Johnson Foundation (RWJF) in 1987.

Using grants and technical assistance from the RWJF, California, Connecticut, Indiana and New York set up Partnership programs based on the RWJF model. That model allows individuals who buy a private policy and use up its benefits to apply for Medicaid and, if approved, to retain assets equal to the amount of money paid out by their long-term care policy.

For more than a decade, federal rules discouraged states from adopting Partnership programs because states have been required to pursue estate recovery of Partnership-protected assets after a beneficiary’s death. But the 2005 Deficit Reduction Act gave states the green light to adopt Partnership programs by doing away with those estate recovery rules. Now, 22 states say they plan to implement a program.

It still is difficult to assess whether the Partnerships will make much of a dent in Medicaid costs. Through mid-2006, fewer than 4,000 Partnership policy-holders had claimed benefits, and only 174 had accessed Medicaid after exhausting their Partnership benefits. Partnership directors, however, say the programs have already saved money. For example, policyholders who begin using their private insurance benefits do not tend to exhaust them (they are more likely to die while receiving the private benefits than to enroll in Medicaid).

At a briefing held by the Alliance, the RWJF’s David Colby said broad expansion of the program won’t happen overnight as “it’s a fairly complex approach to implement.” The Foundation will provide additional start-up money and technical assistance for ten states to implement new Partnerships.

See: http://www.allhealth.org/publications/Long-term_care/Long_Term_Care_Partnerships_53.pdf

Long-Term Care Partnerships— Experience Since Implementation
Partnership states	Program implementation	Policies purchased	Policies in force	Policyholders who received private insurance benefits	Policyholders who exhausted their private insurance benefits and accessed Medicaid
California	August 1994	97,223	81,259	1,270	36
Connecticut	March 1992	42,730	33,952	512	36
Indiana	May 1993	39,063	32,115	391	22*
New York	April 1993	69,690	53,344	1,649	81
Total	--	248,706	200,670	3,822	175

Source: Long-Term Care Partnership program quarterly reports. Data for CA, CT and IN are cumulative through the third quarter of 2006, except for the one figure starred for IN. Data for NY and the starred figure for IN are cumulative through the second quarter of 2006.

© Copyright 2007, State Health Notes

MORE STATES ADOPTING RWJF “PARTNERSHIPS” TO SAVE LONG-TERM CARE DOLLARS

Long-Term Care Partnerships— Experience Since Implementation