Aging at Home is More Than Just a Passing Fad

An astounding 88% of Americans would prefer to receive any ongoing living assistance they need as they age at home or with loved ones, according to a new nationwide survey released this week by The Associated Press-NORC Center for Public Affairs Research.

Furthermore, 69% of participants reported they have done only a little or no planning for their long-term care needs, and 49% of participants over the age of 40 reported that they expect the majority of their long-term care costs will be paid by Medicare. Considering Medicare currently covers very limited long-term care costs, and the Medicare trust fund is at risk to become insolvent in the near future, 89% of participants reported that strengthening the Medicare trust fund should be a priority for the Biden administration and Congress.

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Long-Term Care Insurance Market Updates

We write on a few articles from the past week that we found interesting.

A recent article from Susan K. Neely, President and CEO of the American Council of Life Insurers, “Helping Older Americans Stay in Their Homes,” looks at challenges facing the long-term care insurance market as COVID-19 concerns continue and more and more people consider long-term care their greatest financial concern behind retirement savings. She also discusses how lawmakers are looking for ways to help more people get long-term care insurance.

Read the full ACLI IMPACT article.


In addition, we want to bring your attention to a new Best’s Market Segment Report, “U.S. Long-Term Care Product Performance Pressures Continue.” According to the report, from credit reporting agency AM Best, loss ratios in the LTCi market continue to climb and “poor performance from inadequate pricing is a significant issue for LTC insurers, owing to low interest rates, lapse rates, improving mortality, rising morbidity and policyholder utilization assumptions.”

The Report also looks more closely at certain factors driving rate increases nationwide, the evolution of combo products to meet growing coverage demand and efforts of the National Association of Insurance Commissioners to stabilize the LTCi market. Although, “AM Best views this as a very difficult task given the state-by-state insurance regulatory structures in place, and expects continued use of closed blocks to separate the legacy liabilities from the new ones in order to increase transparency to outside users of financial statements. AM Best also expects LTC insurers to trend toward simplified policy design and fewer assumptions embedded in their policies. Along with carriers slowing down on offering lifetime benefits coverage and inflation-adjusted features, insurers may also soon begin to disregard lapse rates as an underlying assumption for product pricing.”

Read Best’s Market Segment Report. (Subscription Required).


Finally, in “How low interest rates are changing LTC Insurance products,” Tom Rieske, Jr., Managing Director of LTCi Partners, discusses historical trends in LTCi sales (i.e., the trend toward sales of hybrid life and LTC insurance products) and recent reactions to the persisting low-interest rate environment (e.g., development of a hybrid IUL policy with LTC coverage).

Read the full LTCi Partners article.

Long-Term Care Insurance Fraud, Waste, and Abuse: A discussion with Karen Smyth and Jeff Ferrand

Industry stalwarts Karen Smyth (Vice President of Long Term Care Operations at Wilton Re) and Jeff Ferrand (Vice President of Fraud Services at LTCG) have significant experience developing and implementing anti-fraud, waste, and abuse programs at the carrier and TPA level.

Please listen to the below podcast with Chris Petillo and Jessica Loesing as they discuss Karen’s and Jeff’s views on, among other questions, how fraud, waste, and abuse manifest in the LTCi space, and potential efforts carriers and TPAs can use to prevent and detect fraud, waste, and abuse. Karen also shares her experience as a witness in a criminal trial involving LTCi insurance fraud and Jeff shares his past experience as outside counsel prosecuting insurance fraud cases. Finally, stick around to hear some of the creative and industrious ways Karen and Jeff have been passing the time with their families (at home) during the pandemic.

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Part I: InsurTech Movement Shakes Up LTCi Vendor Composition

Compared with other insurance lines and financial services[1], the InsurTech movement had been relatively slow in impacting LTCi. That inertia recently gave way to a bourgeoning group of companies targeting LTC insurers and providers, demanding a first-of-its-kind LTC Tech Summit (presented by the SOA and Maddock Douglas) on November 7, 2019. In anticipation of this year’s Virtual Elder Tech Summit next week, it is worthwhile to look back at some of the next generation vendors that presented last year.

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Florida Bill Restricting Life Insurers’ Use of Genetic Information Signed by Governor DeSantis

Florida has enacted House Bill 1189, which prohibits life and long-term care insurers from canceling, limiting, or denying coverage or adjusting premium rates based on genetic information.

As we previously reported, the bill amends Florida Statute 627.4301, which currently prohibits health insurers’ use of genetic information for insurance purposes. As amended, the statute removes former carve-outs for life, disability, and long-term care insurers, but certain carve-outs remain, such as those for accident-only policies, hospital indemnity or fixed indemnity policies, dental policies, and vision policies.

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Responding and Managing the Impact of COVID-19

Assured Allies and Faegre Drinker have partnered to develop a playbook for the long-term care insurance industry. Responding and Managing the Impact of COVID-19 offers insights, guidance and ideas to manage the short- and medium-term impacts of the COVID-19 global pandemic and provides potential avenues for long-term care insurers to explore in the post-COVID-19 world that could change long-term care insurance forever.

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