e costs. The private insurance market is small, and Medicare explicitly limits coverage for long-term care. Medicaid provides support that is critical to persons who need long-term care, but that support is available only after all other resources have been exhausted. Thus, even with Medicaid, risks are concentrated, not spread.Recently, supportive public policies, mainly subsidies through the tax system, have given hope that the private insurance market could spread the risk of long-term care costs, thereby reaching a much larger portion of the population and greatly reducing burdens on the public sector. (Feder, Komisar, and Niefeld) Recent estimates by the American Council of Life insurance are that private insurance could grow to finance 29 percent of nursing home costs in 2030, ten times their estimate of 3 percent today. Although private insurance seems like a viable option to address the future of long-term care, several policy issues still need to be resolved before it is widely utilized.The first issue involves reforming the market for private long-term care insurance. Current market practices make policies unavailable to those most likely to need long-term care. Benefits cover only a portion of the costs of care and are not guaranteed to keep pace with rising costs or changing practices of care. Also unaccounted for is, the possibility of unanticipated premium increases (even with policies that promise the same premium for the life of the policy). (Benjamin) These features of private insurance, which reflect insurers incentives to limit risk, create a barrier to risk spreading that is also apparent in the private individual health insurance market. The nations continued dissatisfaction with this market should generate skepticism about following a similar path for Long-term care.The second issue is one of equity. Will tax support for private insurance represent an equitable use of public resources? It is thought that tax subsid...
