Adopting catastrophic public insurance for LTSS: Will the United States follow Australia and England
Pamela Nadash | University of Massachusetts, Boston
Objective: To review the development of a catastrophic approach to universal coverage for the cost of long-term services and supports (LTSS) in Australia and England—two countries that have enacted (but not yet implemented) legislation adopting this approach -- and examine the history and prospects of catastrophic LTSS insurance in the United States, a country newly considering its adoption, in light of Australia and England’s experiences.
Data and methods: This is a qualitative study, using document review and key informant interviews.
Results: In the US, discussions of the best design for universal coverage for LTSS have considered a wide range of approaches, from the voluntary publicly administered insurance policy proposed under the Obama health care reform, which offered low-value front-end coverage, to high-value comprehensive coverage provided through expansion of the Medicare program, the public health insurance program for the elderly and permanently disabled. A perennial favorite has been catastrophic coverage – a cap on total LTSS spending, which was first considered for inclusion in the 1988 Medicare Catastrophic Care Act – an idea that has recently been revived by the Bipartisan Policy Center, an influential Washington, DC think tank. At the same time, both Australia and England have passed legislation instituting a cap on lifetime LTSS expenses (the 2013 Aged Care Bill and the 2014 Care Act, respectively), although neither program has yet been implemented. England has delayed implementation due to concerns about funding, while implementation in Australia is ongoing. The context of policy adoption differed between those two countries: England, like the US, operates a means-tested safety-net program for LTSS, while Australia offers universal social insurance to cover LTSS costs, albeit insurance with significant user contributions. The English reform also took place very publicly and was much-debated, while the Australian reform has attracted comparatively little public notice. The parallel trajectories of these nations’ policy development lends support to social welfare typologies that posit a distinctive Anglo-liberal approach, with a heavy emphasis on means-testing.
Policy implications: A caps on lifetime LTSS expenses may be consistent with a means-tested safety-net approach to protecting the public from the potentially high and catastrophic costs of LTSS. This approach may be acceptable in Anglo-liberal states, although the politically important need to protect against moral hazard presents significant challenges for benefit design.