Factors Affecting the Demand for Long-Term Care Insurance: Issues for Congress

Janemarie Mulvey
Specialist in Health Care Financing

As the 80 million baby boomers approach retirement, many are concerned they will not have sufficient savings to sustain their standard of living in retirement. Few, however, may be focused on another risk to their retirement security—the potential cost of financing often expensive longterm care services and supports (LTSS). LTSS include help with either functional or cognitive impairment and generally include assistance with activities such as bathing, eating, and dressing. For the majority of older Americans, the cost of obtaining paid help for these services may far exceed their financial resources in the future.

Private long-term care insurance (LTCI) is available to provide some financial protection for persons against the risk of the potentially high cost of LTSS. In 2010, about 6% of LTSS spending was paid by LTCI. This low rate of financing reflects relatively low demand for LTCI over the past few decades. Moreover, most policy owners have not yet reached the age where they may need services.

In 2010, between 7 to 9 million Americans owned a private LTCI policy, with about 11% of the population aged 55 and older covered by a policy. A number of factors have adversely affected the demand for LTCI. The cost and complexity of LTCI policies have been cited as major deterrents to purchasing LTCI. In addition, increased concerns have arisen about the adequacy of consumer protections for LTCI as a result of inconsistencies in LTCI laws and regulations across the states. More recently, adverse publicity about premium increases and heightened concerns about the future solvency of LTCI insurers in the current economic environment have further dampened demand, prompting state regulators to re-evaluate current regulations and laws governing LTCI.

The private LTCI market has undergone significant changes in the past three decades. The employer-sponsored market has grown as a share of total LTCI sales and the overall market has become more concentrated in terms of the number of companies selling the product. A number of newer product lines have been introduced that combine LTCI with other products, such as retirement annuities and life-insurance products.

Finally, the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) established a federally administered voluntary LTCI program entitled the Community Living Assistance Services and Supports (CLASS) program. However, after careful examination of how the Obama Administration could implement a long-term financially stable CLASS program, the Department of Health and Human Services does not see a viable path forward for implementation at this time.

To address these issues, the 112th Congress may consider a number of legislative options to increase participation in the voluntary LTCI market. These may include proposals to

•         increase tax incentives to lower the after-tax cost of policies, 

•         improve consumer protections to boost consumer confidence in the product, and 

•         expand consumer education. 

This report discusses the role of LTCI in financing LTSS and current trends in the LTCI industry; factors affecting the demand for LTCI, including cost and complexity of the product and adequacy of consumer protections; and legislative options available to address these issues.


Date of Report: April 13, 2012
Number of Pages: 24
Order Number: R40601
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The Americans with Disabilities Act (ADA): Application to the Internet

James V. DeBergh
Legislative Attorney
 
The Americans with Disabilities Act (ADA) provides broad nondiscrimination protection in employment, public services, public accommodations and services operated by private entities, transportation, and telecommunications for individuals with disabilities. As stated in the act, its purpose is “to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities.”

However, the ADA, enacted on July 26, 1990, prior to widespread use of the Internet, does not specifically cover the Internet, and the issue of coverage has not been definitively resolved. The Supreme Court has yet to address this issue, and lower court decisions that directly discuss the ADA’s application to the Internet vary in their conclusions about coverage. On July 23, 2010, the Department of Justice issued an advanced notice of proposed rulemaking which would require Internet providers to ensure accessibility for persons with disabilities.


Date of Report: March 28, 2012
Number of Pages: 14
Order Number: R40462
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Title X (Public Health Service Act) Family Planning Program

Angela Napili
Information Research Specialist

The federal government provides grants for voluntary family planning services through the Family Planning Program, Title X of the Public Health Service Act, codified at 42 U.S.C. Section 300 to Section 300a-6. The program, enacted in 1970, is the only domestic federal program devoted solely to family planning and related preventive health services. Title X is administered through the Office of Population Affairs (OPA) under the Office of the Assistant Secretary for Health in the Department of Health and Human Services (DHHS).

Although the authorization of appropriations for Title X ended with FY1985, funding for the program has continued to be provided through appropriations bills for the Departments of Labor, Health and Human Services, and Education, and Related Agencies (Labor-HHS-Education). Within DHHS, Title X receives its funding through the Health Resources and Services Administration (HRSA) account.

The President’s FY2013 Budget requests $296.838 million for Title X, 1% more than the FY2012 funding level. FY2012 funding for Title X funding is $293.870 million, 2% less than the FY2011 funding level of $299.400 million. The Consolidated Appropriations Act, 2012 (P.L. 112-74) continues previous years’ requirements that Title X funds not be spent on abortions, that all pregnancy counseling be nondirective, and that funds not be spent on promoting or opposing any legislative proposal or candidate for public office. Grantees continue to be required to certify that they encourage “family participation” when minors seek family planning services, and certify that they counsel minors on how to resist attempted coercion into sexual activity. The law also clarifies that family planning providers are not exempt from state notification and reporting laws on child abuse, child molestation, sexual abuse, rape, or incest.

The law (42 U.S.C. §300a-6) prohibits the use of Title X funds in programs where abortion is a method of family planning. According to OPA, family planning projects that receive Title X funds are closely monitored to ensure that federal funds are used appropriately and that funds are not used for prohibited activities such as abortion. The prohibition on abortion does not apply to all the activities of a Title X grantee, but only to activities that are part of the Title X project. A grantee’s abortion activities must be “separate and distinct” from the Title X project activities.

Several bills addressing Title X have been introduced in the 112th Congress. H.R. 217 and S. 96 would prohibit Title X grants to abortion-performing entities. H.R. 408 and S. 178 would eliminate the Title X program. H.R. 1099 would prohibit federal spending on any family planning activity. H.R. 1135, H.R. 1167, and S. 1904 would require an overall spending limit on meanstested welfare programs, defined to include family planning. S. 814 would require online disclosure of audits conducted under Title X on any entity receiving Title X funds. H.R. 1 would have eliminated funding for Title X for FY2011. H.R. 1 and H.Con.Res. 36 would have restricted federal funding to the Planned Parenthood Federation of America and its affiliates for FY2011. The House-introduced FY2012 Labor-HHS-Education Appropriations bill, H.R. 3070, would have prohibited the bill’s funds from being used for Title X. H.R. 3070 would have also restricted the bill’s funding to Planned Parenthood Federation of America and its affiliates unless they certify that the organization will not perform abortions.


Date of Report: March 29, 2012
Number of Pages: 27
Order Number: RL33644
Price: $29.95

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Teenage Pregnancy Prevention: Statistics and Programs

Carmen Solomon-Fears
Specialist in Social Policy

In 2010, U.S. teen births accounted for 9.3% of all births and 20.1% of all nonmarital births. The birth rate for U.S. teenagers (ages 15 through 19) increased in 2006 and 2007 after a steady decline since 1991. However, in 2008, 2009, and 2010 the teen birth rate dropped below the 2007 teen birth rate, reversing the two-year upward trend. Although the birth rate for U.S. teens has dropped in 17 of the last 19 years, it remains higher than the teen birth rate of most industrialized nations. Preventing teen pregnancy is generally considered a priority among policymakers and the public because of its high economic, social, and health costs for teen parents and their families.

The Adolescent Family Life (AFL) program, created in 1981 (Title XX of the Public Health Services Act), was the first federal program to focus on adolescents. It was created to support demonstration projects that provide comprehensive and innovative health, education, and social services to pregnant and parenting adolescents, their infants, male partners, and their families. From 1998 to 2009, federal teen pregnancy prevention efforts in the AFL program and in general relied heavily on using abstinence-only education as their primary tool. The appropriation for the AFL program was $16.7 million in FY2010 and $12.4 million for FY2011. The AFL program did not receive any funding for FY2012.

P.L. 111-117 (the Consolidated Appropriations Act, 2010) included a new discretionary Teen Pregnancy Prevention (TPP) program, funded at $110 million for FY2010, which provides grants and contracts, on a competitive basis, to public and private entities to fund “medically accurate and age appropriate” programs that reduce teen pregnancy. P.L. 112-10 (the Department of Defense and Full-Year Continuing Appropriations Act, 2011) included funding of $109.2 million for the TPP program for FY2011 ($104.8 million for the program; $4.4 million for evaluation). P.L. 112-74 (the Omnibus Appropriations Act, 2012) included level funding of $104.790 million for the TPP program for FY2012 and increased funding for program evaluation to $8.455 million.

P.L. 111-148 (the Patient Protection and Affordable Care Act) established a new state formula grant program and appropriated $375 million at $75 million per year for five years (FY2010- FY2014) to enable states to operate a new Personal Responsibility Education Program (PREP), which is a comprehensive approach to teen pregnancy prevention that educates adolescents on both abstinence and contraception to prevent pregnancy and sexually transmitted diseases. PREP also provides youth with information on several adulthood preparation subjects (e.g., healthy relationships, adolescent development, financial literacy, parent-child communication, educational and career success, and healthy life skills).

The Title V Abstinence Education Block Grant to states was authorized under P.L. 104-193 (the Personal Responsibility and Work Opportunity Reconciliation Act of 1996). The Title V Abstinence Education program is a formula grant program, specifically for abstinence-only education, funded by mandatory spending. The program’s funding expired on June 30, 2009, but P.L. 111-148 reauthorized the program and restored funding to it at the previous annual level of $50 million for each of FY2010-FY2014. P.L. 112-74 included an additional $5 million for competitive grants for abstinence-only education.

This report briefly examines some of the data collected by the National Center for Health Statistics on teenage childbearing, offers potential reasons for high teen pregnancy and birth rates, and provides basic information on federal programs whose purpose is primarily to delay sexual activity among teenagers and to reduce teen pregnancy.


Date of Report: April 12, 2012
Number of Pages: 21
Order Number: RS20301
Price: $29.95

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Federal R&D, Drug Discovery, and Pricing: Insights from the NIH-University-Industry Relationship

Wendy H. Schacht
Specialist in Science and Technology Policy

Public interest in approaches that might provide prescription drugs at lower cost, particularly for the elderly, has rekindled discussion over the role the federal government plays in facilitating the creation of new pharmaceuticals for the marketplace. In the current debate, some argue that the government’s financial, scientific, and/or clinical support of health-related research and development (R&D) entitles the public to commensurate considerations in the prices charged for any resulting drugs. Others view government intervention in price decisions based upon initial federal funding as contrary to a long-term trend of government promotion of innovation, technological advancement, and the commercialization of technology by the business community leading to new products and processes for the marketplace.

The government traditionally funds R&D to meet the mission requirements of the federal departments and agencies. It also supports work in areas where there is an identified need for research, primarily basic research, not being performed in the private sector. Over the past 25 or more years, congressional initiatives have expanded the government’s role to include the promotion of technological innovation to meet other national needs, particularly the economic growth that flows from the use of new and improved goods and services. Various laws facilitate commercialization of federally funded R&D through technology transfer, cooperative R&D, and intellectual property rights. The legislated incentives are intended to encourage additional private sector investments often necessary to further develop marketable products. The current approach to technology development attempts to balance the public sector’s interest in new and improved technologies with concerns over providing companies valuable benefits without adequate accountability or compensation.

Some question whether or not the current balance is appropriate, particularly with respect to drug discovery. The particular nature and expense of health-related R&D have focused attention on the manner in which the National Institutes of Health (NIH) undertakes research activities. Critics maintain that any need for technology development incentives in the pharmaceutical and/or biotechnology sectors is mitigated by industry access to government-supported work at no cost, monopoly power through patent protection, and additional regulatory and tax advantages such as those conveyed through the Hatch-Waxman Act, the Biologics Price Competition and Innovation Act, and the Orphan Drug Act. Supporters of the existing approach argue that these incentives are precisely what are required and have given rise to robust pharmaceutical and biotechnology industries. It remains to be seen whether or not decisions related to federal involvement in issues related to pharmaceutical R&D will change the nature of the current approach to governmentindustry- university cooperation.


Date of Report: April 9, 2012
Number of Pages: 33
Order Number: RL32324
Price: $29.95

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