Innovative Strategies to Finance and Deliver Long-term Care

Policymakers have long tried and failed to solve the vexing problem of long-term care (LTC) insurance. The federal Community Living Assistance Services and Supports (CLASS) Act, a voluntary, publicly administered LTC insurance program, was repealed in 2013, and the problem has gone from bad to worse. The number of private insurers offering LTC insurance has plummeted from over 100 in 2002 to about a dozen today. While some of this is due to consolidation, the larger force driving the exit is lack of profitability. This chapter explores issues surrounding the LTC market including pricing, modeling, and alternative payment models, to better understand the reasons for market failure. We provide a review of innovative approaches used successfully in other industries, which may serve as a model for new ways to finance and deliver LTC. Based on interviews with thought leaders across multiple disciplines and industries, we identify three of the most promising solutions: public and private LTC insurance, Medicare expansion, and technology.