Senior Issues (B) Task Force s2

Attachment ?

Senior Issues (B) Task Force

4/??/16

Draft: 3/30/16

Long-Term Care Innovation (B) Subgroup

Conference Call

March 21, 2016

The Long-Term Care Innovation (B) Subgroup of the Senior Issues (B) Task Force met via conference call March 21, 2016. The following Subgroup members participated: Teresa Miller, Chair (PA); Fred Anderson, Kristi Bohn, Candace Gergen, and Sherri Mortensen-Brown Vice Chair (MN); Mary Ellen Breault (CT); Eric Jonson and Chris Struk (FL); Kathy McGill (ID); Yvonne Clearwater (IL); Marti Hooper (ME); Chanell McDevitt and Brendan Peppard (NJ); Elizabeth Kelleher Dwyer (RI); Candy Holbrook (SD); and Molly Nollette (WA).

Also participating were: Steve Ostlund (AL); Sam Chen and Perry Kupferman (CA); Sally Frechette (DE); Amy Beard (IN); Cindy Hermes (KS); Mary Mealer (MO); Jay Eads (MS); Chrystal Bartuska, Nishit Goradia, and J.P. Sabby (ND); Bruce R. Ramge (NE); Terry Seaton (NM); Cuc Nguyen (OK); Andrew Dvorine (SC); Chlora-Lindley-Myers (TN); Doug Danzeiser, Jan Graeber, Dewayne Mathews, and Bethany Sims (TX); Tomasz Serbinowski (UT); and Bob Grissom (VA).

1. Presentation from Katherine Hayes, Director of Health Policy, Bipartisan Policy Center

Ms. Miller provided a recap of the previous call and turned the call over to Ms. Hayes.

Ms. Hayes provided an overview of the Bipartisan Policy Center (BPC) and a brief review of the BPC’s report “Initial Recommendations to Improve the Financing of Long-Term Care.” Ms. Hayes stated that sales of long-term care insurance are slowing due to policies being too expensive, distribution too limited, and the traditional design is not sustainable for carriers. She pointed out the challenges in finding consensus on long-term care financing, such as: what are the roles of public programs, the commercial private market, and individuals and families; the lack of awareness of the costs and need for long-term care; the mistaken presumption that Medicare and Medicaid will cover long-term care needs; and the differing needs of long-term care in the population.

Ms. Hayes stated that here is no single solution and targeted programmatic changes addressing the needs of specific groups may be the most viable approach in the current political environment. One suggestion Ms. Hayes proffered is “retirement long-term care insurance” which may be more supportable for carriers. This product would be lower in cost, designed to cover two to four years of benefits, and allow for a 20% coinsurance. To make this product more appealing, funds may be used from retirement accounts to pay retirement long-term care insurance premiums and early withdrawals would be penalty free. In addition, these retirement long-term care insurance plans would have standard inflation protection updated annually; non-level premiums updated for growth in the consumer price index; and carriers would be required to revise premiums, up or down, every three years, based upon updated actuarial assumptions.

Ms. Hayes also suggested that expanding availability of long-term care insurance could be done by encouraging employers to offer and make available long-term care insurance. She recommended that employers who offer long-term care insurance be offered a safe harbor and expanded “catch-up” contributions if the employer automatically enrolls employees, who would have the ability to opt-out. She pointed out that this has never been pursued and there is no guarantee of success. To encourage individuals without employer-sponsored coverage, Ms. Hayes suggested allowing retirement long-term care insurance to be sold public and private health insurance marketplaces.

Ms. Hayes discussed the issue of that segment of the population with catastrophic long-term care needs and alternatives to spending down to Medicaid. She pointed out that a public investment is probably needed to address catastrophic, back-end long-term care, although there would be significant political hurdles, especially after the repeal of the Community Living Assistance Services and Supports (CLASS) Act. Ms. Hayes also stated that any public financed catastrophic long-term care plan would probably need to be offset and suggested some approaches to financing, such as a dedicated payroll tax similar to Medicare Part A or changes to the tax system.

Commissioner Miller asked if there were any comments or questions.

Mr. Anderson asked about automatic enrollment and asset qualifications of at least $50,000 of assets.

Ms. Bohn asked about automatic enrollment, 401K plans, and tax exempt issues.

Bonnie Burns (California Health Advocates—CHA) said that a key component missing in these discussions is care management and coordination and this must be part of any discussion in addressing the financing of long-term care.

Silvia Yee (Disability Rights Education and Defense Fund—DREDF) inquired about those with significant disabilities, able to work, and in need of episodic treatment.

Having no further business, the Long-Term Care Innovation (B) Subgroup adjourned.

G:\Health and Life\Long Term Care Insurance\LTC Innovation (B) Subgroup\Minutes LTC Innovation 03-21-2016.docx