Dementia-related claims costs continue to present the single largest claim liability to long term care carriers. Left unmanaged, this potential liability can threaten the long-term stability of premium rates–an issue of particular importance to LTC producers as well as policyholders, carriers, and insurance regulators.
It’s not surprising then, that for the better part of the last two decades, insurers have been screening LTC applicants for dementia.
Early tests focused on identifying applicants who already exhibited signs of dementia. Second-generation tests were more predictive in that they were a bit more successful in identifying applicants at early stages of dementia, who typically exhibit some outward signs of a dementing disorder.
Nearly six years ago, a third-generation cognitive screen, the enhanced mental skills test (EMST) was introduced and is now extensively used by LTC carriers. The test is designed to detect applicants at the very earliest stages of cognitive decline, a state known as mild cognitive impairment (MCI).
MCI is a subtle but measurable memory disorder. A person with MCI experiences memory problems greater than is normally expected with aging but does not show other symptoms of dementia such as impaired judgment or reasoning. The rate of progression from MCI to dementia or Alzheimer’s disease is between 6% and 25% per year and can be present for up to 7 years before manifesting itself as observable dementia.
Now that more than a quarter million EMST screens have been completed, there is enough credible data to report on the impact of such screening on the rate of early cognitive claims. This article will look at claims that have occurred within a three-year period after initial underwriting. The dataset is comprised of 208,000 people who were screened and became policyholders.
Roughly half (49%) were under age 65, 26% were between ages 65 and 71, and 25% were over 72. Some of these individuals received telephonic screens, whereas others were screened in person.
We surveyed 9 major LTC companies currently using the screen and obtained information about the number of policyholders who passed the EMST, became policyholders and who then had become claimants within three years of policy issue and whose primary diagnosis is Alzheimer’s/dementia. Thus, we reported on the dementia-related claims experience of applicants screened for MCI and who were issued a policy.