Letters From Industry Leaders

I write in response to your March 21, 2005 article, “Commissioners: Should LTCI Sales Continue?”

While our industry recognizes that there will continue to be challenges that need to be addressed within any system as complex as the benefits insurance marketplace, we would submit to you that the long term care insurance companies are today marketing products to consumers that are designed for maximum flexibility and affordability.

In fact, a recent report by the Department of Health and Human Services on policies and facilities in New Hampshire and Alabama found that a vast majority of claimants (95% of nursing home claimants and 89% of assisted living claimants) were satisfied with their LTCI policies. Additionally, 85% of claimants in both states had no difficulty in understanding what their policy covered, and a significant majority (85% in NH and 74% in AL) found the claims process easy to navigate.

LTCI has evolved over the years to meet the changing needs of policyholders and caregivers across the country. We know from surveys that LTCI can make purchasers feel more secure because they feel they have taken appropriate steps to plan for their future and the future comfort of their loved ones. These same surveys show that LTCI saves disabled policyholders significant out-of-pocket costs, and that having such a policy can reduce by 66% the chances that a person would have to spend down assets for nursing home care to the point of impoverishment in order to qualify for Medicaid.

As Congress debates the most appropriate use of limited dollars in our nations public programs, we can see a direct effect of LTCI. Current policies help reduce state and federal Medicaid expenditures and federal Medicare home health expenditures. Medicaid savings are projected to total about $5,000 per policyholder and Medicare savings are estimated to exceed $1,600. Aggregate savings to Medicare and Medicaid for the current number of policyholders (about 10 million) are estimated at about $30 billion, a number which is bound to grow as more individuals purchase policies at a younger average age and more employers offer policies moving forward.

The Federal Employees Health Benefits Program also has recognized the importance of LTCI and offers access to such policies today. Since the launch of the program, it has attracted 250,000 policyholders who recognize the importance of planning for their futures.

Moving forward, our industry welcomes dialogue and debate on how best to streamline and improve the LTCI marketplace, but we would encourage lawmakers first to do no harm as we work together to provide the best for Americas future.

Karen Ignagni

President and CEO

Americas Health Insurance Plans

Washington, D.C.

Reproduced from National Underwriter Edition, April 1, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.