NAIC LTCi Task Force Adopts MSA Framework, Wellness Document and Policyholder Communication Checklist

At its recent Fall 2021 National Meeting, the National Association of Insurance Commissioners’ (NAIC) Long-Term Care Insurance Task Force adopted the following items:

  • the revised LTCI Multistate Rate Review Framework (MSA Framework);
  • the LTC Wellness Benefits Document (See Attachment Six of the Meeting Materials, page 65); and
  • the Checklist for Premium Increase Communications (See Attachment Seven of the Meeting Materials, page 82). The MSA Framework will be considered by Exec/Plenary at the 2022 Spring National Meeting.

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Many Long-Term Care Insurance Claims Begin Later in Life, New AALTCI Data Shows

It comes as no surprise that as Americans live longer, long-term care and long-term care insurance needs are increasing.

The American Association for Long-Term Care Insurance (AALTCI) recently released data  surveying the landscape of who needs long-term care insurance (LTCi), when they need it and how their claims end in different care settings.  AALTCI published its findings in its “2022 Long-Term Care Insurance Information” survey.*

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Economic and External Factors That Influence Long-Term Care Claims

The Society of Actuaries concluded its 4th Long-Term Care (LTC) Medical Symposium on December 2, 2021. The Symposium historically features professionals and experts from outside of the LTC insurance industry to provide insight into the external forces shaping the delivery of LTC in the US, with an eye towards how LTC insurers may pay future claims. Over the past 3 years the Symposium has featured a broad array of professionals such as gerontologists, neurologists, facility managers, nurses, demographers, biologists, economists, investment managers, and more. See the 2018, 2019, and 2020 Symposia write-ups for more information.

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Senior Living 2021 Claims Benchmarking Study

Senior Living owners and operators have seen­­—and will likely continue to see—growing liability costs as the COVID-19 pandemic persists, a new survey from Willis Towers Watson shows. The study aimed to estimate loss costs, defined as loss cost per unit of exposure, over a 10-year period to measure how the frequency and severity of claims brought against long-term care (LTC) facilities’ owners and operators has changed over time.

The survey included 38 senior living owners and operators. Those owners and operators reported more than 14,000 claims and almost $2 billion in incurred losses from 2009 to 2019. The survey also found that the number of claims against LTC operators for more than $1 million rose over the course of the 10-year period. Similarly, the average cost of claims is higher since 2016 than from 2009 to 2016. Prior to 2016, the value of an average claim rose by 4% annually. Between 2016 and 2019, claim value grew at a rate of 11.56% per year.  States with tort reform generally saw less severe claims, and thus lower loss costs, whereas states without senior living tort reform generally saw higher, increasing costs.

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COVID-19 Continues to Impact Attitudes About Long-Term Care, New Survey Shows

As we continue to grapple with the effects of COVID-19 across the country, many Americans believe it is now more important than ever for people to have a long-term care (LTC) plan (88%) and LTC insurance (86%), per the 10th Annual Nationwide Retirement Institute® Long-term Care survey released in mid-November.

However, nearly half of adults across all age groups (45%) say they have not had a conversation about LTC planning with anyone and only 8% have spoken about it with a financial professional. Moreover, industry data show that only 15% of Americans (mostly older consumers) have purchased LTC insurance. The survey also revealed that many adults misunderstand what products actually provide LTC coverage because 25% of adults self-reported that they own a LTC insurance policy. Millennials are the most likely to claim that they currently own LTC insurance (39%), but most say that they bought the insurance at work, evidencing a likely misconception among adults confusing long-term disability insurance with LTC insurance. The survey thus highlights in multiple places the trend of the disparity between knowing the importance of preparing for LTC needs, and actually preparing for those needs.

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NAIC’s Long-Term Care Insurance Multistate Rate Review (EX) Subgroup Releases New MSA Framework Draft

NAIC’s Long-Term Care Insurance Multistate Rate Review (EX) Subgroup recently released a new draft of its MSA Framework document. Comments are due by December 6.

The NAIC has charged the Long‐Term Care Insurance (EX) Task Force with developing a consistent national approach for reviewing current LTCi rates that results in actuarially appropriate increases being granted by the states in a timely manner and that eliminates cross‐state rate subsidization.

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Washington State’s New Long-Term Care Public Option Podcast

In our latest podcast, I am joined by Margie Barrie* to discuss Washington’s new long-term care insurance public option, Washington Cares. See generally Wash. Stat. 50B.04.010, et seq. As many of you know, Washington permitted a one-time opt-out from the Washington Cares program—and the associated payroll tax (effective January 1, 2022) being used to fund the program—for people who purchased qualified LTCi by November 1, 2021.

After briefly discussing the key features of the law, we discuss how the exemption to the payroll tax dramatically impacted Margie’s life as a broker selling LTCi; what we heard from our carrier contacts on how it impacted new business in Washington this year; and what we are hearing about other efforts to deploy similar legislation in other states. Margie and I also discuss our plans to continue to track this significant development in long term care. We will be focusing on the impact of the Washington legislation and other states considering LTCI public options.

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The NAIC LTCi Reduced Benefit Options Subgroup Reports on Potential Issues Related to LTC Wellness Benefits

On July 22, 2021, the NAIC Long-Term Care Insurance Reduced Benefit Options (EX) Subgroup, led by Commissioner Altman (PA), posted its first draft of a discussion paper Issues Related to LTC Wellness Benefits online. Comments are due September 5, 2021.

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