The states and the feds are taking limited steps to encourage people to buy LTCI.
Here's a map showing the states with existing LTCI "Partnership Programs." These programs have several attributes, but one of the main ones is this: Residents who buy an approved LTCI policy in a partnership state don't have to spend down all their assets to qualify for Medicaid coverage. If, say, you buy a LTCI policy with a $200K benefit, then you'll qualify for Medicaid benefits when you've spent your own assets down to $200K. In addition, some states (including Ohio) are actively pushing LTCI through statewide advertising campaigns as a means to reduce their Medicaid expenditures.
I'm not a big fan of the product, but the states sure see value in it.
The rumors of possible inclusion of some type of LTC coverage in the federal health care legislation must have been terrible for the LTC insurance biz. Few will want to buy private policies while this is being discussed.