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October 17, 2006 (512) 463-0300

HEALTH AND HUMAN SERVICES, STATE AFFAIRS COMMITTEES HOLD JOINT MEETING ON LONG TERM CARE ISSUES

Two Senate committees held a joint meeting Tuesday, October 17 to consider the issue of rising Medicaid costs in the face of increasing need and demand for long-term health care facilities. The Health and Human Services Committee and the State Affairs Committee were charged together with the task of reviewing possible solutions to the increase in long-term health care use due to a growing elderly population.

One solution to this problem, according to the Deputy Chief of Staff at the state Health and Human Services Commission Maureen Milligan, is to use public/private partnerships in helping Texans to purchase private health insurance that covers the cost of long-term care. These programs allow seniors to protect their assets by purchasing a certain amount of private insurance, but still remain eligible for Medicaid services. Four other states, California, Connecticut, Indiana and New York, have similar programs in effect, but Milligan said that more time is needed to see how effective these programs are.

Across those four states, 266,000 individuals have taken part in partnership programs, buying long-term care policies with asset protection. Program participants tend to be between 58-63 years of age, average $60,000 in annual income, and average $350,000 in personal assets. Participants averaged $73,000 in protected assets. Only 1.3 percent of participants have used their policies at this point in time to cover long-term care.

State Affairs Chair Senator Robert Duncan of Lubbock expressed concern that by allowing more affluent people access to Medicaid through these partnership programs, that participation and subsequently the state cost to Medicaid will increase. Milligan said that when provisions of the Federal Deficit Reduction Act that permitted partnership programs were analyzed by the Congressional Budget Office, the federal auditors projected an ultimate increase in Medicaid costs, but that these projections have yet to be realized.

Health and Human Services Chair Senator Jane Nelson of Flower Mound said that she, as a business owner, would be glad to offer long-term care insurance to her employees, if there were a greater incentive from the state to make it affordable. Senator Tommy Williams of the Woodlands said that private policy holders could use their extra insurance money to improve the quality of care provided through Medicaid.

The Senate State Affairs committee will continue work on the issue of state health care at a hearing Wednesday looking at the actuarial soundness of the state's Teacher and Employee Retirement System.

Session video and all other webcast recordings can be accessed from the Senate website's audio and video archive pages.

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