The middle-class elderly are faced with a difficult choice. As their health deteriorates, they are forced to decide whether they should "spend-down" their assets in order to qualify for Medicaid protection or attempt to purchase, at least until their money runs out, the expensive and inevitable long-term care that they will require. In either case, these citizens will eventually wind up on Medicaid, the primary source of funding for long-term care, without any of their assets: assets that often took a lifetime to create. In 1988, New York State and private insurance companies joined forces to develop an insurance policy that would protect New Yorkers from the financial consequences of long-term care. The program, entitled Partnership for Long Term Care, provides insurance to elderly people and complete protection of personal assets. The benefit of the program is either three years of nursing-home care or six years of home health care. After these benefits are exhausted, policyholders become eligible for Medicaid benefits to which they can contribute only income; assets are entirely protected. Policyholders receive the assurance that their homes, savings accounts, and investments will not be depleted in a matter of months by expensive care. The State receives assistance from private insurers in paying a greater portion of the soaring Medicaid bill for long-term care. Also, the partnership has improved the long-term insurance industry by creating standardized benefits, clarifying costs, and offering a range of consumer protections.
In their first year the program acquired seven carriers who approved 2,380 policies. These policies represent 2,380 families that can now retain their assets and still care for their aging parents. These policies represent 30 percent of the State's total long-term policy sales in 1993. The program's campaign is also credited for increasing awareness of the problem, resulting in a 50 percent increase in New York's 1993 long-term policy sales overall: a 50 percent increase in sales while the rest of the nation's long-term insurance policy sales remained flat.
The 2,380 policies alone are expected to save the state one percent in annual Medicaid expenditures: one percent equals $700,000 a year of the State's $7 billion Medicaid bill. The average policy cost, $2,033 annually, is often criticized for being too expensive for New York's poorer citizens, yet it represents an affordable alternative for those that can afford it and a significant savings for the State. However, New York is making serious efforts to increase awareness of the program. They have created a toll-free hotline and hired actress Celeste Holm as a spokesperson for the public campaign, triggering an average of 2,000 inquiries a month. The goal is to alert the rest of the estimated 700,000 elderly New York citizens that are eligible for the program. Partnership for Long Term Care's innovation is the collaboration between public-private entities to address a growing social and economic need. The model has created an expanding market for the private insurance agencies, a viable option for citizens confronting long-term care, and a significant savings for the state taxpayer. As the U.S. population continues to age in the 21st century, jurisdictions will continue to look for solutions to providing care. New York has created a model that has a positive impact on all parties involved.