Complexity is a key barrier to success in the current private market, said Dr. Bruce Chernof, chief executive of the SCAN Foundation, one of the funders of the research. “The social science literature shows that when people have too many choices, they freeze.”
The researchers believe these simplified policies would cost about half of current private market insurance policies. The American Association for Long-Term Care Insurance reports that typical annual initial premiums for high-quality coverage currently range from $2,035 for a single male buyer, age 55, to $2,580 for a single female buyer of the same age. A married couple age 60 can expect to pay an average of $3,560. Some rates have fallen over the past year, the trade group reports.
Create A Public Option
The BPC also proposes shifting coverage for patients with lifetime costs exceeding $250,000 to a public plan run by the federal government.
A catastrophic Medicare benefit would be costly. BPC estimates that if 90 percent of Americans were covered, benefits paid in 2015 would have totaled $411 billion, or about half the cost of Medicare’s Part A (hospitalization) program. Some of that cost would be offset by lower Medicaid spending, but a new revenue source would also be needed - either an increase in the payroll taxes paid by workers for Social Security and Medicare, or through a “general funding” source, such as changes to the income tax or a consumption tax.
New taxes are a nonstarter in Washington today, and LTC reform is not likely to move forward during this election year. But Chernof sees 2016 as a good time to lay the groundwork for action next year.
“There is a really good opportunity to have a broad discussion about what the future looks like for families during the campaign,” he said. “And the first year of a new Congress is always an important time for setting the legislative agenda.”