Never miss any update

Subscribe to the Advisor's View of Long-Term Care Planning newsletter today to receive updates on the latest news from our carriers.

Your privacy is important to us. We have developed a Privacy Policy that covers how we collect, use, disclose, transfer, and store your information. 

Apr 8, 2014 • LTCI Partners

Bipartisan Policy Institute discusses LTC Financing Reform

Two Democrats and two Republicans - Tom Daschle, Alice Rivlin, Bill Frist and Tommy Thompson - are leading a bipartisan effort to put a focus on LTC financing.  You can view the initial 75-minute video presentation which includes remarks by the Genworth CEO below. (Note:  The video was recorded off a live streaming session and there are video problems at the 40 minute mark - but audio works fine.)

The initiative is through bipartisanpolicy.org and they've created a white paper which can be downloaded here   

  

One topic the white paper discussed was how to reform LTC Insurance - and the role it plays. Here is an excerpt from the report.

No one would argue that the private long-term care insurance (LTCI) market, as currently 
structured, is a viable solution to address the needs of the diverse population in need of 
LTSS. Among other financial challenges, such as the current low-interest-rate environment, 
LTCI has struggled to find a viable risk pool. As with traditional health insurance coverage, 
the current voluntary system for private long-term care insurance has encountered adverse 
selection, driving up premium costs, and resulting in strict medical underwriting by insurers. 
The Affordable Care Act (ACA) addressed medical underwriting in the health insurance 
market by requiring individuals without other qualified coverage to purchase coverage or 
pay an assessment to assure a viable risk pool. While a potential policy approach for LTC, 
BPC does not believe that guaranteed issue paired with a requirement to purchase coverage 
is a solution that can be pursued in the post-ACA political environment. Likewise, recent 
experience with the enactment and repeal of the CLASS Act might suggest that a voluntary 
public option would have little support among policymakers in the current environment. 
However, a reformed private long-term care insurance market can be part of the solution in 
financing LTSS, and BPC seeks input on how to restructure the market. 

 



• What is the role of the private long-term care insurance market? 
• What reforms should be enacted to encourage carriers to remain in the market and 
encourage additional carriers to enter? 
• How should products be structured to achieve this goal?

 

  • Should products be structured and regulated similar to Medigap, with limited choices, or should the market be left flexible to address purchaser choice and market innovation? 

• How should products be made available to individuals? Through the current system 
of brokers and sales representatives, through employers, through retirement (IRA, 
401[k], etc.) account servicers, through health insurance exchanges, or through 
other options? 
• Should LTC insurers be expected to better manage services, similar to health 
insurers, as opposed to paying claims or establishing per-diem payments? 
• Could a non-insurer provider-sponsored model work for LTSS, and if so, how could 
solvency issues be assured? 
• Are additional consumer protections needed, and if so, what would they include? 
• What impact has existing consumer protections had on product design, availability, 
and affordability? 
• In a political environment that is trending toward fewer deductions and preferential 
tax treatment, can or should the current structure of state regulation with certain 
federal minimum standards for tax-preferred policies be maintained? 
• Would a voluntary structure work if framed to be similar to employer-sponsored 
retirement-savings options and disability insurance (i.e., auto-enrollment with an 
opt-out)? 
• If so, how would one address the issue of affordability for those who cannot afford 
coverage? 
• Could some form of reinsurance improve the viability of the LTCI market, in general, 
and the viability of policies with catastrophic (lifetime) coverage, in particular? 
• How could reforms that increase the role of private LTCI in financing LTSS reduce the 
incidence of spending down to Medicaid eligibility for individuals and families and 
reduce public spending on Medicaid?

 This will be interesting to see what comes out of this organization.

Written by LTCI Partners