The Challenging but Promising Environment for LTC Insurance Susan - - PowerPoint PPT Presentation
The Challenging but Promising Environment for LTC Insurance Susan Coronel, Americas Health Insurance Plans Agenda NAIC LTCI Structure & Responsibilities Interstate Compact State Level What We Need to Monitor & Address
Susan Coronel, America’s Health Insurance Plans
NAIC LTCI Structure & Responsibilities Interstate Compact State Level – What We Need to Monitor & Address Federal LTC Financing Policy Options
LTC B/E Task Force
Senior Issues Task Force LTC Innovation WG Health Actuarial Task Force LTC Actuarial WG LTC Pricing SubG LTC Valuation SubG
Additional Groups to Monitor Interstate Compact D Committee Market Conduct Speed to Market SERFF Advisory Board
LTCi B/E Task Force charges include
coordinating all NAIC work related to LTCI assessing financial solvency of LTCi carriers evaluating financial reporting and actuarial valuation standards looking at state rate increase activity to achieve greater predictability/transparency coordinating state actions aimed at revising state guarantee fund laws monitoring the development of regulatory policy of LTCi short duration LTCi considering product innovations and the development of potential state/federal solutions for
stabilization the LTCi market
LTCi B/E Task Force released results of the state reported carrier financial solvency status
surveys on 9/6/17
Industry believes the results are actuarially flawed
NAIC Senior Issues considers LTCI related policy issues, regulatory standards and revisions to
NAIC LTCi Models
▪
Latest changes to the LTC Models & Guidance Manual adopted in 2014- 2016
▪
Currently considering new Models for short duration LTCI and updating LTCI Shoppers Guide
LTC Actuarial, Pricing and Valuation Groups
▪
Asset Adequacy Testing of LTC Reserves
▪
Continued discussion on recoupment of past losses. Expect an LTC resource document but not a Model change
▪
Will monitor new asset adequacy over the next few years and review current LTC exhibits for current relevance
LTCI Innovation
▪
Private Market Options for Financing Long-Term Care Services adopted. The report is intended to provide regulators, policymakers, consumers and other stakeholders an overview of LTC financing mechanisms to consider in the private market
5
1.
Permit retirement plan participants to make a distribution from 401(k), 403(b) or IRAs to purchase LTCI with no early withdrawal tax
2.
Allow creation of LTC Savings Accounts, similar to HSAs and/or enhance use of HSAs for LTC expenses and premiums
3.
Remove the HIPAA requirement to
LTCI and remove DRA requirement to include inflation protection and allow the States to determine the %
4.
Allow flexible premium structures and/or cash value beyond return of premium
5.
Allow products that combine LTC coverage with various insurance products (including products that “morph” into LTCI)
6.
Support innovation by improving alignment between federal law and NAIC models
7.
Create a more appropriate regulatory environment for Group LTCI and worksite coverage
8.
Establish more generous federal tax incentives
9.
Explore adding a home care benefit to Medicare or Medicare Supplement and/or Medicare Advantage plans
retirement security and importance
39 - 38 Compact LTC States + PR
WA OR CA NV UT ID MT ND WY AZ NM CO SD NE KS OK TX AK HI LA AR MO IA MN FL MS AL GA WI IL MI IN OH KY WV VA NC TN SC ME PA NY MD DE NJ CT RI VT MA NH .
Non-Compact State
6 Compact State but Opt-Out for LTC (AZ, CT, HI, IN, MT & NJ)
filing
experience warrants
and opt-out states to join IIPRC for LTC in order promote speed to market
Legislative/regulatory initiatives
that will impede carriers’ ability to implement actuarially justified rate increases
Appropriate actuarial standards of
review for LTCI, LTCI rate increases and the marketplace generally
Legislative/regulatory initiatives
that will expand and promote LTCI as well as new and innovative solutions to the nation’s expanding LTC funding problem
State adoption of the current NAIC
LTCi Models
Legislative/ regulatory initiatives
that would take LTCI out of the “excepted benefit” category and treat inappropriately as health
Retroactive application of any
legislative/regulatory initiative that is harmful to LTCI
Impact of any legislative/
regulatory initiative that may be a barrier to combination products and other future innovative LTCI products
The aging of the baby-boom generation – the 78.2 million
Americans – poses major challenges for policymakers.
Over half of all Americans turning age 65 today will need LTC at
some point in their lives.
The Department of Health and Human Services estimates that
individuals and their families pay for 52% of LTC expenditures out-
(such as benefits for veterans) cover about 10%. Private LTC insurance covers less than 3% of expenditures.
With Medicare and Medicaid already burdened by high costs, it
is clear that public programs intended to meet the needs of the elderly will be severely stressed in the years ahead.
A crucial question facing policymakers is how to create the
right balance between public and private responsibilities – between the obligation of government to provide a safety net for those who need it, and the obligation of citizens to provide for themselves to the extent they are able to do so.
1. Allowing employers to offer LTC insurance through cafeteria plans and flexible spending arrangements. 2. Removing barriers that prevent retirement plans from investing directly in LTC insurance (the within plan approach). 3. Allowing individuals with existing Health Savings Accounts (HSAs) to make additional contribution to their HSA to pay for LTC insurance. 4. Establishing a federal education campaign program around retirement security and the importance for planning for LTC.