C. Consumers Paying for LTSS Through Private Long-Term Care Insurance
A number of people in the U.S. purchase private insurance that specifically covers all or part of the costs of specified LTSS, although the potential market for this form of insurance is much larger than the actual market saturation achieved thus far. 107 The contractual terms of these insurance products, which usually are lumped together under the heading of “long-term care insurance” (LTCI), 108 may vary substantially in the details of coverage, eligibility, qualifying conditions for payment, deductibles and co-insurance requirements, inflation protection for benefits, and premium prices, all depending upon the particular policy purchased. As a general matter:
Long-Term Care Insurance is privately contracted health insurance for long-term care expenses. The coverage is generally activated when the insured needs assistance with certain activities of daily living as defined by the terms of the policy. A long-term care policy generally will provide coverage for: home health care (beyond that covered by Medicare); care offered where one resides in assisted living, memory care, or personal care facilities; and nursing home care. Additionally, a policy may provide coverage benefits for adult day care, respite care, and hospice care (beyond that covered by Medicare). 109
Traditional claims-based coverage directly reimburses providers for renderedservices. 110 Bycontrast,indemnity-based(“cash-based”)long-term care insurance provides the insured with a check that represents the maximum allowable daily benefit amount stipulated in the policy. 111 The latterformismoreconsistent withconsumer-directed LTSS. 112
107. See, e.g., Peter Kyle, Confronting the Elder Care Crisis: The Private Long-Term Care Insurance Market and the Utility of Hybrid Products, 15 MARQ. ELDER’S ADVISOR 101, 106 (2013). Compare Enrique Zamora et al., Long-Term Care Insurance: A Life Raft for Baby Boomers, 26 ST. THOMAS L. REV. 79, 102 (2013) (describing LTCI as “a viable option”), with Judy Feder, The Challenge of Financing Long-Term Care, 8 ST. LOUIS U. J. HEALTH L. & POL’Y 47, 47 (2014) (criticizing private long-term care insurance because it “typically costs a lot, offers limited value, and is subject to premium increases that can cause purchasers to lose coverage they have paid into for years”). 108. Eileen Walsh & Whitney Wilson, An Introduction to Funding Long-Term Care Without Medicaid, 35 BIFOCAL 17, 19 (2013). 109. Id. 110. Joe Tomlinson, Comparing Long-Term Care Alternatives, ADVISOR PERSP. 1 (Dec. 18, 2012), http://www.advisorperspectives.com/newsletters12/pdfs/Comparing_Long- Term_Care_ Alternatives.pdf. 111. Indemnity LTC Policy Provides Consumer-Directed Option, Says Long-Term-Care- Insurance-Planners.com, BUSINESS WIRE (Dec. 9, 2005, 5: 32 PM), http://www.business wire.com/news/home/20051209005538/en/Indemnity-LTC-Policy-Consumer-Directed- Option-Long-Term-Care-Insurance-Planners.com. 112. Id.