Private LTC Insurance is a not a population solution

The WSJ has a good point/counter-point on the question “should you purchase private Long Term Care Insurance?” (h/t Brad Flansbaum). Mark Meiners argues for purchase by saying “you shouldn’t hope for the best” while Prescott Cole says “LTC insurance is too expensive, you should invest what you would spend on premiums.”

Essentially, they are both arguing that you should prepare for LTC, one via purchasing insurance, the other by building flexible assets that could be use for LTC, or bequeathed to your favorite charity upon your death if die without needing it.

The Journal piece outlines an important conversation that misses the main public policy point: private LTC insurance will never be the solution for the LTC needs of the general population due to income and wealth levels.

Perhaps 10 percent of the population has enough income to pay premiums, and/or enough in assets they may wish to partially protect from a potentially catastrophic LTC cost. For example, past work I have done showed that around 4 in 10 elderly persons had income and assets at age 65 low enough to qualify for Medicaid before paying for any LTC. Those people are removed from the complicated decision framed in the WSJ piece, but they are certainly at risk of needing LTC.

If ever there were a risk profile that cried out for social insurance, it is LTC. The reason that seems so laughable, is our countries failure to grasp the most important thing in all public policy debates: the counterfactual, or the costs and benefits of what happens by default, in this case for LTC.

About Don Taylor
Professor of Public Policy at Duke University (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute). I am one of the founding faculty of the Margolis Center for Health Policy, and currently serve as Chair of Duke's University Priorities Committee (UPC). My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

3 Responses to Private LTC Insurance is a not a population solution

  1. Pingback: Long Term Care problems won’t go away « freeforall

  2. Pingback: Long Term Care problems won’t just go away « The Reality-Based Community

  3. Pingback: The thing that worries me most about the long term health system outlook | freeforall

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