LTC Insurance Partnerships

Pursuant to a congressional request, GAO provided information on a foundation's projects for linking long-term care insurance with the Medicaid program. GAO noted that: (1) four states currently participate in the Program to Promote Long-Term Care Insurance for the Elderly; (2) the Health Care Financing Administration approved Connecticut's proposal to amend its Medicaid plan to allow recipients who have certified long-term care insurance policies to retain assets above the Medicaid eligibility thresholds; (3) the Connecticut project would reduce the risk of increased Medicaid expenditures by limiting the amount of assets that beneficiaries can protect and by requiring them to spend their incomes to Medicaid eligibility thresholds; (4) Indiana and California projects, which have structures similar to the Connecticut project, also reduce the risk for increased Medicaid costs, but the New York project, which is structured differently, may not reduce such risks; (5) other states may be interested in amending their Medicaid plans to establish long-term care insurance projects, but the federal government may need to exercise greater oversight and limit its financial liability for Medicaid costs resulting from such projects; and (6) there are no federal consumer protection standards for long-term care insurance.