Private long-term care insurance (LTCI) is now in its fourth decade - the last, in the view of some, in which it will be sold widely across America. Before we observe the obsequies, it may be well to take stock of where we actually are, because sales of stand-alone LTCI products - not to mention linked or combination products, chronic illness coverage, and short-term care insurance - do take place each day, suggesting that private LTCI is filling a need.
Insurance carriers see the critical illness and chronic care riders as a major opportunity to sell more life and long-term care coverage at a time when life insurance sales are flat and low interest rates exert a damper on insurance products...
The new, revised version of the National Alzheimer's Plan gives little attention to the idea that private insurance could help consumers prepare for the cost of dealing with Alzheimer's disease and other forms of dementia.
LifeHealthPro.com recently ran an article about new U.S. Department of Health and Human Services (HHS) final regulations that will let insurers continue to use genetic information in underwriting long-term care insurance (LTCI), for now.
- Long Term Care Product Design: Two Common-Sense Recommendations
- Conducting a Long-Term Care Experience Study
- Solving the LTC Crisis in 20 Minutes
- 500 LTCI Producers Gather to "Focus Forward"
- Touch-Screen Technology
- Stay the Course
- Winning Strategies for a Changing Game
- First-Principles LTC-Survivorship
- A Voluntary Lapse Rate of 12.6 Percent for LTCI? Not Really
- Change Is Constant
How can stochastic modeling be used to better understand the risks in long-term care insurance (LTCI)? How can predictive modeling be used to better understand the latest trends in, and to better manage, claims? How are long-term care (LTC) companies managing their investment risk in the current historically low-interest-rate environment? These are some of the topics that will be discussed in this session. This session will focus on the current hot topics in LTCI and how they may affect the product development.
This article is featured on page 26 of the September 2012 SOA Long Term Care Newsletter. Other articles in this issue include:
The Future of Genetic Testing is Now
Aspirin, Not Morphine
LTC Dashboard - Key Accessory to High-Octane Performance
Opinions and a Conversation on LTC Financing
Independent Providers: A Long-Term Care Insurance Conundrum
AGGIR, the Work of Grids
Thoughts of a Landscaper
As a veteran long-term care insurance (LTCI) specialist in California, I have been witness to the turmoil surrounding the availability of this insurance. Following are some of my perceptions relating to provider/pricing stability.
The 2012 Long Term Care Insurance Survey is the 14th consecutive annual review of long term care insurance (LTCI) published by BROKER WORLD magazine. The survey compares products, reports sales distributions and analyzes the changing marketplace.
One of the main challenges today for reinsurers and direct writers is mapping their accepted long-term care insurance applications into optimally appropriate underwriting risk classes. Underwriting manuals provide not just procedures and assumptions, but also an instructive view into how direct long-term care (LTC) writers look at risk.
Carriers providing long-term care (LTC) insurance have historically invested significant resources in risk management activities designed to ensure that policies are properly priced and that premiums can remain relatively stable for consumers. An important focus of such risk management activities has been the medical underwriting process and more specifically dementia screening.
The latest issue of Long Term Care News includes:
- Taming a Wild Ride: Investment and Risk Management Strategies for Long-Term Care Insurers in a Challenging Market
- Microcosm of Economic Concerns in 2011
The wax and wane of pre-funded Long Term Care (LTC) insurance products is a complex story to tell fully. One contributor to the recent Chartered Insurance Institute (CII) conference, “Who cares? The Future of Long-Term Care Funding”, may have oversimplified it when stating, “they just did not sell”. Campbell (2009)5 provides a more subtle analysis of the decline in pre-funded LTC policies. Whatever the background story, just 15,000 such policies remained in force at the end of 2010. More recently, Immediate Care Annuities have been more in vogue but even this market has remained relatively small with around 1,500 new policies being sold each year. In order to bring fairness, order, sustainability and affordability to this complex arena, Dilnot makes a number of key proposals:
Older women with sleep-disordered breathing are more likely to develop cognitive impairment or dementia than women without this disorder according to a new study.
According to medical researchers, sleep-disordered breathing is a condition where the person has recurrent arousals from sleep and intermittent hypoxemia. “This condition can be common among older people and affects up to 60 percent of the elderly population,” explains Jesse Slome, director of the American Association for Long Term Care Insurance.
Gastrointestinal complaints are very common in the general population and very often co-occur with common mental disorders. We aimed to study the prospective impact of gastrointestinal complaints on long term sickness absence, and address the contribution from co-occurring common mental disorders and other somatic symptoms.
It is estimated that one-in-three people over the age of 65 fall each year. Falls have long been recognised as a leading cause of disability and even mortality in older people, particularly those aged over 75. About 5% of community-dwelling elders who fall require emergency medical care.
The current state of the long-term care insurance market has quite a few people wondering about its viability. But are these
Recently, the market has attracted some high-profile news stories with several carriers raising in-force business premiums or ceasing sales of new LTCI business altogether. What is behind these stories? Do they paint the whole picture? What does the LTCI market really need to turn the corner?
The average annual cost of a private room in a U.S. nursing home has increased to $77,745 this year, up 3.4% from the 2010 average.
Analysts at Genworth Financial Inc., Richmond, Va. (NYSE:GNW), have published those figures in a summary of results from a survey of 15,500 long term care providers in 437 regions throughout the United States.
There is already well established evidence that individuals with functional impairments and dementia face a higher risk of mortality than those who are not impaired.1,2,3,4,5,6,7,8 What is less well-known, however, is the association between the very earliest stages of cognitive decline—having mild cognitive impairment— and subsequent mortality experience.
The purpose of this research is to analyze the relationship between being classified as cognitively impaired by two alternative cognitive screens and mortality rates among long-term care (LTC) insurance applicants.
The 2010 Fact Book provides statistics and information on trends in the life insurance industry. Specific topics covered include assets, liabilities, income, expenditures, reinsurance, life insurance, and annuities.
John Hancock Financial (John Hancock)recently announced the results of its 2011 cost of care study, which found that long-term care (LTC) costs have continued to increase, but not as much as other goods and services.
The "pre-dementia" state has been conceptualized in a number of different ways usually described as Mild Cognitive Impairment (MCI) with subjective memory complaints (SMC) a consistent part of the criteria along with measurable impairment, preservation of functional ability and not meeting the criteria for dementia. This edition of Gen Re's LTC Quarterly explores the question of SMCs and the value of obtaining information of this type at underwriting stage.
There is an elephant in the room that will not go away. Its presence should be crowding out any breathing room remaining to maintain a seemingly impenetrable wall of self-deception. In recent speeches, our Health and Human Services Secretary has concluded her long term care conversation by clearly defining the presence of the massive pachyderm.
This edition of Gen Re's LTC Quarterly considers whether the generation known as the Baby Boomers is likely to enter later life with better or worse age-specific rates of morbidity and disability than earlier cohorts.
A 55-year-old couple purchasing long-term care insurance protection can expect to pay $2,350-per-year (combined) for about $338,000 of current benefits ($169,000 each) which will grow to about $800,000 of combined coverage for the couple when they turn age 80.
The data comes from the 2011 Long-Term Care Insurance Price Index published by the American Association for Long-Term Care Insurance that analyzed rates for 11 long-term care insurance policies.
The nation’s 10 leading long-term care insurance companies paid over $10.8 million in daily claim benefits in 2010 according to a new study conducted by the American Association for Long-Term Care Insurance (AALTCI).
This represents a 53 percent increase over the daily value of claims paid by the same entities in 2007 according to study findings.
Long term care insurance sales are expected to remain relatively consistent with prior years, which means between 350,000 and 375,000 new policies/certificates will be issued (roughly 1,000 new insureds per day).
According to the Metlife Market Survey of Long-Term Care Costs, nursing home and assisted living rates have been on a steady incline since 2009.
There has been a 4.6 percent increase in private room nursing home rates, raising to $229 per day or $83,585 per year, with the highest average daily rates in Alaska, where rates are now $687 for a private room and $610 for a semi-private room. Costs are lowest in Louisiana, outside the Baton Rouge and Shreveport areas, at an average of $138 per day for a private room.
The cost of private-room nursing home care is averaging $83,585 this year, up 4.6% from the 2009 average, and the average annual cost of staying in an assisted living facility increased 5.2%, to $39,516 per year.
The MetLife Mature Market Institute, Westport, Conn., an affiliate of MetLife Inc., New York (NYSE:MET), has published those figures in a summary of results from a long term care market survey.
Older men may be at risk of developing mild cognitive impairment (MCI), often a precursor to Alzheimer’s disease, earlier in life than older women, according to a study appearing today in Neurology.
Primarily funded by the National Institute on Aging (NIA), part of the National Institutes of Health, the study raises the question of whether there may be a gender difference in the development and progression of MCI.
For people free of dementia, abnormal deposits of a protein associated with Alzheimer’s disease are associated with increased risk of developing the symptoms of the progressive brain disorder, according to two studies from researchers at Washington University in St. Louis. The studies, primarily funded by the National Institute on Aging (NIA), part of the National Institutes of Health, linked higher amounts of the protein deposits in dementia-free people with greater risk for developing the disease, and with loss of brain volume and subtle declines in cognitive abilities.
A study published in Archives of Neurology reports that a new spinal fluid test can predict with 100 percent accuracy those patients suffering memory loss who will eventually develop Alzheimer’s disease.
This breakthrough offers new hope to victims of the disease and their families, who heretofore could only know for sure that Alzheimer’s was the cause of their suffering after an autopsy was performed.
The research team found an association between tobacco industry affiliation and the conclusions of individual studies that fail to link the association. Industry-affiliated studies they noted indicated that smoking protects against the development of AD, while independent studies showed that smoking increased the risk of developing the disease.
According to the American Association for Long-Term Care Insurance (AALTCI), there are about 24 million people in the world living with dementia, with 4.6 million new cases coming forward every year.he study by Boston University School of Medicine (BUSM) published online in the journal Annals of Neurology, confirms the inverse association of increasing BMI with lower brain volumes in older adults and with younger, middle-aged adults.
Falls and fall prevention are a concern for the elderly and people with osteoporosis, according to data from trhe American Association for Long-Term Care Insurance. Osteoporosis is an increasingly common chronic disease that causes weak and fragile bones.
New research shows seniors with higher levels of vitamin D demonstrate more youth and vitality as they enjoy longer life spans. A limited number of studies have pointed to the possibility that optimal intake of vitamin D (the “sunshine” vitamin) might help keep our muscles strong and preserve physical function. To help understand this diet-health association, researchers at Wake Forest University studied the relationship between vitamin D status and physical function in a group of relatively healthy seniors living in Memphis, TN and Pittsburgh, PA.
The American Association for Long-Term Care Insurance has come out with a consumer guide, which offers new data on the duration of LTCI claims as well as other findings related to LTCI. The data come from a study conducted for the group by Milliman, Inc.
Medicalnewstoday.com is reporting on new research which suggests that neurons, or the brain’s nerve cells, may be created even in old age. Prevailing scientific belief held that most neurons are lost shortly after birth, with the loss slowing but continuing throughout one’s life.
Studies have shown that SCI is experienced by between one-quarter and one-half of the population over the age of 65. Research published in the January 11, 2010, issue of the journal Alzheimer's & Dementia, finds that healthy older adults reporting SCI are 4.5 times more likely to progress to the more advanced memory-loss stages of mild cognitive impairment (MCI) or dementia than those free of SCI.
More women receive privately paid for care at home for lingering health issues with more obtaining this care at older ages than men according to a new report from the American Association for Long-Term Care Insurance. Nearly 60 percent of those receiving care were women with over 80 percent age 75 or older the study found.
The older population is becoming more racially and ethnically diverse as the overall minority population grows and experiences great longevity. In fact, the percentage of older persons, which was 16 percent of the older population in 2000, is expected to grow to 24 percent by 2020. This section provides information on minority elders in the United States.
A new study conducted by the American Association for Long-Term Care Insurance shows that more women receive privately paid-for in-home care than men but that women tend to receive this care later in life than men. Approximately 60 percent of those receiving care were women and more than 80 percent were 75 or older.
The cost of home care appears to be increasing far less rapidly than the cost of nursing home care, according to Genworth Financial Inc. (NYSE:GNW). Nursing home rates have climbed at an annual median rate of 4.5% for private nursing home rooms over the past 5 years, while the annual median increase has been just 1.7% for licensed home health aides and 2.4% for licensed homemaker services over that same period, according to Genworth, Richmond, Va.
Roll over the Genworth Financial interactive map to compare your state or region's median cost of care to other areas in the country. Click a state or region to view and calculate current and projected long term care costs. Scroll down the page to learn more about Cost of Care and the methodology used for the Genworth 2010 Cost of Care Survey.
Americans are living longer, but how will that extended lifespan affect your clients’ plans for retirement? By 2050, about 20 percent of Americans will be 65 or older, U.S. News and World Report writes - that’s about 90 million people. Of those, 11 percent will be 75 or older, and 9 percent will be between 65 and 74. The magazine highlights some trends that will shape seniors retirements.
The rate for all causes of dementia in people age 90 and older is 18.2% annually and significantly increases with age in both men and women. A new report, called “The 90+ Study,” is one of only a few to examine dementia in this age group, and the first to have sufficient participation of centenarians.
The Society of Actuaries' Long–Term Care Insurance Section and the ILTCI Conference Association research report exploring functional and cognitive trends among assisted living facility residents. The report, authored by Jessica Miller, Marc Cohen, and Xiaomei Shi of LifePlans, Inc., examines data on long-term care policyholders to gain insight into these trends.
Stress levels among caregivers were high for both younger (age 45 to 64) and older (age 65+) boomers, found the study by the Hartford Financial Services Group Inc. and ComPsych Corporation, Chicago, an employee assistance program administrator.
Research published in the Journal of Alzheimer Disease reported on a study of women with Down Syndrome, who are known to have an early onset of menopause. The results of the research can be translated to apply to the general population.
Purchasers of true group long-term care insurance tended to be slightly older in 2009 and an increasing number selected less costly policy features according to the American Association for Long-Term Care Insurance (AALTCI) annual study of group (employer sponsored) long-term care insurance. The organization’s research was based on an analysis of nearly 66,000 new purchasers.
Individuals purchasing long-term care insurance in 2009 tended to be slightly older and selected less costly policy features according to the American Association for Long-Term Care Insurance (AALTCI) annual study. The organization’s research was based on an analysis of 155,000 individual placed policies.
In this guest editorial for The Geneva Association's Health and Ageing newsletter, Howard Gleckman reviews the current long-term care financing model in the U.S., as well as several potential alternatives, including the CLASS Act.
A Washington Post article recently compared the U.S. Medicaid system unfavorably to the long term care systems for the elderly and those with disabilities employed in France and the United Kingdom. Going back 20 years, most of the developed world relied on a system similar to the one the United States uses: Poor enough and sick enough and you received some assistance; middle class and you were on your own (until your resources became so depleted that you no longer qualified as middle class.)
Most developed countries determined that this approach was unnecessarily cruel and fiscally unwise, and revamped their systems to address the need for long term care, often in arrangements that combine government assistance with private long term care insurance. The U.S. response was to encourage its citizens to purchase private long-term care insurance.
According to government data, some 7.5 million individuals currently receive extended periods of care at home because of acute illness, permanent disability, or long-term health conditions. The nation’s annual cost for care in 2010 is projected to exceed $59 billion.
According to new research published in the latest issue of The Journals of Gerontology Series A: Biological and Medical Sciences, individuals with higher midlife body mass index (BMI) scores had significantly lower general cognitive ability and significantly steeper decline than their thinner counterparts over time.
Understanding long term care insurance terminology is often the cause of great confusion and frustration for advisors as well as consumers.
Much of the benefits terminology was derived from the long term disability industry, where it also bewildered applicants. Today, many LTC policies use simpler and more understandable concepts, but assessing the terms carefully is still essential, because terms differ between contracts and they may involve tradeoffs from traditional comprehensive LTC insurance.
The study provides an in-depth look at Americans born 1952 - 1958. The Baby Boomer generation, typically, has been characterized as a bloc of people who think and act as one monolithic generation, when it actually comprises three separate cohorts. This study found that there are distinct differences between these Middle Boomers and their older and younger generation mates.
The American Academy of Actuaries told state regulators it will be developing long term care morbidity tables.
Members of the Accident and Health Working Group at the National Association of Insurance Commissioners, Kansas City, Mo., heard about the LTC insurance valuation morbidity tables project early this week during a working group teleconference.
Long-term care specialists—including consumer advocates, providers, public officials, and policy experts—who participated in a national survey generally agreed on the need for long-term care reform. Despite some differences, key constituent groups supported the establishment of government-sponsored financing strategies, a shift toward home- and community-based care, offering payment incentives to improve quality, and more effective regulation of nursing homes, home health care agencies, and assisted living facilities.
A proposal in the House and Senate healthcare reform bills, the CLASS Act, establishes a federal long-term care (LTC) program financed from participant premiums without any federal subsidy. The new LTC program is subject to guaranteed issue, and that, combined with its voluntary nature, subjects the CLASS Act to considerable adverse selection risk. This paper by Al Schmitz examines this risk while considering other likely consequences.
Broad health care reform legislation being considered by Congress would effect a major change in the way the United States finances long-term care. The Community Living Assistance Services and Supports (CLASS) Act would create a voluntary national long-term care insurance program. As lawmakers debate the potentially far-reaching proposal, they may learn from the experiences of other developed nations and from recent experiments in the U.S.
A series of publications provide a history of the generations born since the early 1900s. The profiles provide a snapshot of four generations. They look at demographics and, perhaps more importantly, the events occurring during their teen and young adult years that influenced their values and their viewpoints.
From 2000 through the first half of 2009, sales of long-term care (LTC) insurance plunged—a phenomenon that would seem to defy demographic trends that show an increasing number of Americans turning 60 each year. Rate hikes, product uncertainties, and an intractable reluctance by consumers have made LTC insurance a difficult sale. But a number of market and regulatory factors have come together to spur innovation in combination products that pair LTC with an annuity or life insurance. Could this next generation of hybrid products be the solution that consumers and insurers have been seeking?
During 2003-07, among adults aged ≥65 years, the poorest (<100% of the poverty threshold) were approximately twice as likely to need help with ADLs as the least poor (≥300% of the poverty threshold). Older adults were more likely to have 3-6 ADLs than 1-2 ADLs, except for the poorest group where the difference was not statistically significant.
The Pension Protection Act of 2006 included some key provisions that addressed for the first time the taxation of combination annuity plans featuring long-term care insurance (LTCI). The rules apply only to nonqualified annuities coupled with tax-qualified long-term care riders.
The largest open long-term care insurance claim has surpassed $1.2 million in paid benefits, according to a just-released report from the American Association for Long-Term Care Insurance. The claimant, a woman, purchased coverage at age 43, paying an annual premium of $1,800. Three years later her claim began and has continued for almost 12 years. [Note: Payment of policy premiums ceases when an individual is receiving policy benefits.]
A 55-year-old individual considering long-term care insurance protection can expect to pay $723-per-year for a base level of protection if they are married or $1,060 if they are single according to the 2009 Long-Term Care Insurance Price Index published by the American Association for Long-Term Care Insurance. Across various age groups, costs for coverage increased about two percent from the prior year.
The Geneva Association's April 2009 Information Newsletter spotlights long-term care and aging issues from a global perspective. The guest editorial by Christopher Ball and Ross Campbell discusses instruments that produce the right information for underwriters and claim managers to better insure long-term care risks. Housing, Medicare and long-term care insurance are also examined.
When it comes to buying long-term care insurance protection, there are some significant differences between those purchasing group (employer-sponsored) coverage with those purchasing on an individual basis (typically through an insurance professional).
Some 400,000 individuals purchased long-term care insurance protection in 2008 according to a just-released report. The overwhelming majority (84%) of individual buyers in 2008 were younger than age 65 and three-fourths (76%) selected a more affordable approach to this protection by opting for coverage for a specific number of years.
The annual study conducted by the American Association for Long-Term Care Insurance, the industry's professional trade organization, analyzed data on 215,000 buyers of individual long-term care insurance protection.
Recognizing that government can't pay the bill for long-term care, federal and a growing number of state tax codes now offer tax incentives to encourage Americans to take personal responsibility for their future long-term care needs. (The American Association for Long-Term Care Insurance)
As 2008 came to an end, many of us found ourselves wondering what the adjective 'long-term' means in the context of wildly gyrating stock markets and the day-to-day uncertainty this turbulence has created for countries around the globe."
When working with an older client in the planning process, the individual’s health may be a critical component of the underwriting equation. Right from the start, there are certain issues that should be taken into consideration.
The Pension Protection Act of 2006 includes some important tax rules affecting combination plans that feature life or annuity plans coupled with long-term care insurance (LTCI). Many of these rules will become effective Jan. 1, 2010. In some cases, the rules will be applicable to policies on the books prior to that time. Among the benefits resulting from these new rules, the most notable would seem to be the clarification of tax treatment of annuity/LTCI combination products.
Price rollbacks throughout the U.S. economy during the past year did not apply to long-term care service providers, according to the 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs. Private room nursing home rates rose 3.3% to $219 per day or $79,935 per year, while assisted living also rose 3.3% on average to $3,131 per month. Home health care aides now cost an average of $21 per hour, a 5% increase; adult day services run $67 per day, a 4.7% increase.
It is no secret that the long-term care insurance (LTCI) industry is having trouble offering products with a convincing and an attractive value proposition. In a recently released report, Conning Research & Consulting, Inc. reminds us that from an economics point of view, in order for a consumer to purchase a product, the product must 1) satisfy a perceived need or a want for which the consumer is personally responsible and 2) have an acceptable price. It appears that there are large gaps between LTCI consumers and insurers in both of these areas. (link updated)