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1991.09.04 :  Connecticut Medicaid Plan Amendment

Contact:  Bob Hardy (202) 245-6145
September 4, 1991

        HHS Secretary Louis W. Sullivan, M.D., has announced the 
approval of a Medicaid state plan amendment that implements a
partnership between the state of Connecticut and the private
health insurance industry to fund nursing home care and a
continuum of community services for the elderly.
        Under the partnership plan, people are encouraged to plan
for their long-term care needs in old age by purchasing private
long-term care insurance.  If the insurance benefits are used up
in paying for long-term care, participating individuals are
allowed to keep personal savings and other assets in the amount
equal to the benefits paid by the policy and still qualify for
Medicaid assistance.  Typically, an individual must now spend
almost all assets before qualifying for Medicaid help with long-
term care costs.
        Connecticut's plan was developed under a planning grant
from the Robert Wood Johnson Foundation (RWJ) which has supported
initiatives in eight states to promote long-term care insurance
for the elderly.  The intent of the RWJ program is to provide
middle-income elderly a means of protecting themselves from
potentially catastrophic long-term care costs.  In addition, the
RWJ projects have sought to improve consumer safeguards in the
emerging private
long-term care insurance market. 

                          - More -- 2 -

      In announcing approval of the Connecticut state plan
amendment, Secretary Sullivan said that the debate on how best to
finance the long-term care needs of the nation's elderly is still
at an early stage without a clear consensus about desirable future
policy directions.  Connecticut's approach is one of several
potential options for addressing long-term care needs.
      "I am very pleased," said Dr. Sullivan, "that the Robert
Wood Johnson Foundation has taken the initiative to stimulate state
and private-sector innovation around one of the key domestic policy
issues we will face over the next several decades."
      Secretary Sullivan said, "Although I am not prepared to
endorse the Connecticut project as a national model before it has
been thoroughly tested, I believe that other states, the federal
government and private insurers can gain valuable information and
experience from Connecticut's pioneering efforts."
      Secretary Sullivan expressed particular interest in the
potential of the Connecticut project for strengthening consumer
protections around private long-term care insurance products and
increasing consumer confidence that they are a good value.


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