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Long Term Care Insurance Essay

Given the increasing longevity of Americans and the costs of providing long-term care, anticipation of the costs should be a major element of every family’s financial planning. Current information suggests however, that very few families or individuals give this consideration. What factors might impede this advance planning? What measures might be effective in raising awareness among Americans about this important matter? Support your answer with at least one outside reference. People tend to be irrational in their decisions with regard to long-term medical care.

The factors that impede rational decision-making among health care consumers have not changed over the last decade. The major problem is that consumers lack relevant information about the availability and effectiveness of health care services in long-term perspective (RWJF, 1998). Another problem is that rational decision-making about long-term care inhibits the sense of autonomy among consumers; in other words, “consumer unwillingness to plan for future long-term care needs undercuts their autonomy and precipitates a rush toward dependence and financial difficulties” (RWJF, 1998).

Ultimately, consumers have a hidden hope that their relatives and not medical facilities will help them resolve their decision-making issues in future. Here, an information campaign could help develop consumer awareness about the benefits of advance planning, as well as the availability, and the quality of health care services. Very often, physicians themselves fail to assess long-term consumer needs; as a result, better training and full information about the types of long-term health care arrangement may help improve the situation.

The number of those involved into advance planning programs will serve a reliable indicator for the program effectiveness in the long run. 2. More than three-fourths of the elderly needing assistance is cared for by family members, many of whom also work outside the home. What implications does this have for employers? What types of employer policies might be appropriate regarding those engaged in providing long-term care for a family member? Support your answer with at least one outside reference.

Statistical research suggests that “over three quarters – 78 percent – of adults receiving long-term care at home rely exclusively on assistance from family members, friends, and volunteers, referred to as informal care” (Thompson, 2004). Despite the benefits which caregiving offers to a disabled person, it has far-reaching negative implications for the mental, physical, and social state of the caregiver. Beyond the mere fact that caregivers are more vulnerable to mental and physical health complications, they face serious employment challenges.

“Some caregivers reduce their hours and others withdraw completely from the labor force” (Thompson, 2004). Employers find it difficult to work with employees, who are depressed or are ill as a result of excessive caregiving. Here, Long Term Care Insurance (LTCI) may save employers and employees from financial and physical losses. LTCI is usually a small expenditure for a firm (all LTCI premiums are tax deductible). Simultaneously, “it assures quality when needed, and equally important, helps the employee protect assets for retirement” (Florek, 2005).

Taking into account that workplace accommodations made by caregivers usually cost up to $30 billion annually in lost productivity (Florek, 2005), LTCI may become an excellent solution, providing employers and employees with a chance for a better quality of care without substantial losses for business. 3. Concerns regarding the potential costs of caring for those with mental illness have caused the majority of insurers and HMOs to rely on “carve-outs” written into their policies. In your own words, describe what the term “carve-out” means in regards to the behavioral health industry.

What are the advantages and disadvantages to this practice? Support your answer with at least one outside reference. “Carve-out” is a relatively new alternative model of health care provision in behavioral health industry. In simple terms, a “carve-out” is a system of administrative measures used by health care facilities to shift their responsibility for consumers’ mental health onto a different network of mental health providers. In carve-outs, “a specialty organization or vendor assumes the responsibility for identifying a network of mental health providers, establishing a mechanism for accessing those providers” (Entrepreneur, 1998).

The impact of carve-outs on the quality of health care is rather controversial. Not all states were able to perceive the benefits of significant cost reduction that usually follows the development and implementation of carve-out initiatives at the state level (Brisson et al, 1997). Although Massachusetts was the one to experience dramatic decrease in medical expenditures, that was not the case for Tennessee (Brisson et al, 1997). Moreover, Merrick, Garnick & Horgan (2001) suggest that carve out benefits do not protect enrollees from the “risk of catastrophic expenditures”.

In terms of quality care, the results of scarce research suggest that the implementation of carve-out mechanisms is not associated with a better (or worse) quality of care (Busch, Frank & Lehman, 2004). As a result, the advantages of carve-out programs do not seem to go beyond the dry financial statistics in regards to the reduction of expenditures in mental health industry. References Brisson, A. E. , Frank, R. G. , Notman, E. S. & Gazmararian, J. A. (1997). Impact of a managed behavioral health care carve-out: A case study of one HMO. National Bureau of Economic Research.

Retrieved January 26, 2009 from http://www. nber. org/papers/w6242. pdf Busch, A. B. , Frank, R. G. & Lehman, A. F. (2004). The effect of a managed behavioral health carve-out on quality of care for Medicaid patients diagnosed as having schizophrenia. Arch Gen Psychiatry, 61: 442-448. Entrepreneur. (1998). Managing behavioral health. Entrepreneur. com. Retrieved January 26, 2009 from https://www. entrepreneur. com/tradejournals/article/54586928_1. html Florek, P. (2005). Long-term care insurance: protecting the employer, employee, and family. RedOrbit. Retrieved January 26, 2009 from http://www. redorbit.

com/news/technology/267111/longterm_care_insurance_protecting_the_employer_employee_and_family/index. html Merrick, E. L. , Garnick, D. W. & Horgan, C. (2001). Benefits in behavioral health carve-out plans for Fortune 500 firms. Psychiatr Serv, 52: 943-948. RWJF. (1998). Advance planning helps consumers make better decisions about long-term care. Robert Wood Johnson Foundation. Retrieved January 26, 2009 from http://www. rwjf. org/reports/grr/022308s. htm Thompson, L. (2004). Long-term care: support for family caregivers. Georgetown University. Retrieved January 26, 2009 from http://ltc. georgetown. edu/pdfs/caregivers. pdf


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