Can Incentives for Long-Term Care Insurance Reduce Medicaid Spending?

The brief’s key findings are:

• In an effort to curb Medicaid costs, many states encourage people to buy long-term care insurance by offering enhanced policies through private insurers.
• Under these policies, if individuals exhaust their private insurance benefits, the state allows them to qualify for Medicaid while keeping more of their assets.
• This study finds that, for single men and women, the enhanced policies will likely increase Medicaid costs rather than reduce them.
• The reason is that most of the likely buyers of the enhanced policies would have otherwise bought a traditional policy, which has no subsidy from Medicaid.