2022 ILTCI Conference

Faegre Drinker is proud to sponsor The Intercompany Long-Term Care Insurance Conference to be held March 20-23 at the Raleigh Convention Center. The conference is the largest multidisciplinary long-term care conference in the U.S. and will include dozens of educational sessions featuring industry thought leaders and LTCI community insiders.

Here is a brief look at the panels that will include members of our Team, with topics ranging from litigation, to aging in place, to rate increase innovations:

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Long Term Care Discussion Group Meeting Highlights Retirement Risk Surveys

In a recent presentation hosted by the Long Term Care Discussion Group, retirement policy consultant Anna Rappaport and Barbara Hogg of Aon’s Retirement Practice discussed two recent surveys focusing on different aspects of retirement planning: the 2021 Retirement Risk Survey (focused on the different perceived retirement planning challenges between retirees and pre-retirees age 45 or older), and the Generations Survey (comparing financial management across generations across a broad range of financial issues, including financial fragility).

A common theme in both surveys was the COVID-19 pandemic’s dramatic effect on circumstances and perceptions about planning for and thriving in retirement. For example, the Retirement Risk Survey showed that 1 in 10 pre-retirees plan to retire later because of the pandemic, and more than 3 in 10 pre-retirees who experienced negative financial impacts from COVID-19 plan to retire either somewhat later or much later than they previously planned. Pre-retirees were also more likely than retirees to consider changing their lifestyle, working longer, and changing care arrangements for family. For those with a higher degree of financial fragility, the survey showed those individuals feel less financially secure as a result of the pandemic, prioritizing short-term goals over retirement planning. Fifty-eight percent of financially fragile individuals responded that the pandemic has created “major financial challenges” for them, compared to only 11% of low fragility individuals.

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Cost of Care Survey Shows Uptick in Homecare Services and LTC Costs

The cost of long-term care services increased across all provider types in 2021, according to a recently published 18th annual Cost of Care Survey* from Genworth. Specifically, the 2021 Cost of Care data shows the highest year-over-year increase in homecare services since Genworth began tracking the cost of care in 2004. Homecare services include homemaker services and home health aides. Individuals that provide homemaker services assist with “hands off” everyday tasks, such as cooking and cleaning. Home health aides assist with “hands on” tasks, such as bathing and dressing.

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AALTCI Launching Long-Term Care Insurance Claims Resource Center

According to a recent survey from The American Association for Long-Term Care Insurance (AALTCI), the nation’s long-term care insurance companies paid out more than $12 billion in claims benefits in 2021. That represents a $700 million increase over 2020, and a $2 billion increase since 2018.

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Louisiana Secures Temporary Injunction in Connection with the SHIP Rehabilitation Plan

Senior Health Insurance Company of Pennsylvania (“SHIP”) was placed in rehabilitation in Pennsylvania in January 2020.  On August 24, 2021, the Commonwealth Court of Pennsylvania approved the Rehabilitation Plan (the “Plan”), which includes a nationwide premium increase and several benefit modification options that will be presented to policyholders to avoid or mitigate the rate increase.  The Plan includes an opt-out for state regulators who elect to review the proposed rate increase, but if an opt-out state does not approve the full rate increase the options available to policyholders of policies issued in that state would not include an option for the policyholder to retain the full benefit amounts set forth in their policy.  Because of the novel strategy to pursue a rate increase/benefit modification through the rehabilitation court, the Plan has proven to be controversial.  For example, the chief insurance regulators in Massachusetts, Maine and Washington have filed an appeal in the Supreme Court of Pennsylvania to challenge and block the Plan (and a group of 27 other state insurance regulators filed an amicus brief in support of this challenge). The Pennsylvania Supreme Court recently denied an application for a stay of the approval of the Plan while the appeal is pending.

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Challenges of Long-Term Care

The Biden administration recently proposed $400 billion (reduced to $150 billion) in new funding to support home-care workers as part of the Build Back Better plan. But in a recent article in National Affairs, “The Long-Term Care Challenge,” Professor Robert Saldin* argues that this proposal does not go far enough to meet the burgeoning need for long-term care (LTC). Saldin asserts that Americans’ “woeful ignorance” of their own eventual need for LTC insurance, together with worsening demographic trends, has created a need for a “universal national program to mitigate the catastrophic [LTC] costs that drain state budgets and impoverish middle-class Americans.”

Saldin begins by outlining the well-known demographic trends that are exacerbating the already grim state of LTCi in America. About 60 percent of those who require LTC are over the age of 65, and those individuals receive 80 percent of national LTC spending. These trends are set to worsen over time, he says, requiring systemic reform to avoid “significant constraints on America’s dynamism and vitality.” For example, Saldin notes that some estimates suggest that by 2030 24 million people will required LTC, up from 14 million now.

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Other States Slow to Follow Florida’s Lead on Genetic Information Restrictions

With the widespread availability of genetic testing, especially in direct-to-consumer forms, there is a growing concern about the privacy of that information and whether it can be used by insurers to underwrite policies for certain lines of insurance. Federal law provides a base amount of protection through the Genetic Information Nondiscrimination Act (GINA), which prohibits discrimination based on genetic information in both the health insurance and employment context. However, GINA does not apply to life, disability or long-term care insurance. With such limited federal protections, individual states are left to provide greater protections if they wish to.

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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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