LONG-TERM-CARE INSURANCE AND MEDICAID

Depending on length-of-stay, somewhere between 29 percent and 38 perce nt of long-term care insurance purchasers who use nursing homes would qualify for Medicaid payments if they did not own a policy. This is eq uivalent to between 13 percent and 17 percent of all policyholders. Ow ning such a policy would, however, reduce spend-down rates among polic yholders by 39 percent. Thus, in the presence of long-term care insura nce, only 8 to 10 percent of all policyholders would receive Medicaid. Medicaid would spend between $6,492 and $14,179 (in 1990 dollars) on nursing home entrants with long-term care insurance policies-$14,437 t o $29,698 if entrants did not have insurance. The ultimate impact on M edicaid expenditures is reduced, however, because many policyholders v oluntarily let their policies lapse before entering nursing homes. If policies paid reduced benefits for voluntary lapses, then Medicaid cou ld reap more significant fiscal savings.