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State LTCI Program Suffers from Low Participation

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A three-year-old state-run LTCI initiative in Texas has so far failed to elicit much public participation, and those involved in the industry say they need to do more to get Texans involved in the effort.

In a story from the Fort Worth Star-Telegram, the Texas Department of Insurance says that only 10,443 partnership policies have been sold in the three years since the state LTCI partnership program was launched.

Organizers stress that the LTCI partnership program allows residents to protect their assets if they end up needing to apply for Medicaid coverage, but say that the benefit has been largely overlooked.

LTCI specialists such as Cathy Flanagan of the Dallas-Fort Worth office of Long-Term Care Financial Partners say that residents simply do not seem to be aware of the benefits available.

Texas is one of several partnership states across the country which included asset disregard benefits in their plans, allowing policy owners to protect assets equal to the amount of insurance benefits received, rather than requiring them to be liquidated in order to qualify for Medicaid coverage.

Thirteen LTCI companies are currently affiliated with the Texas program, including major players such as Prudential and John Hancock.

To qualify for the partnership, LTCI plans need to include an inflation rider which boosts benefits for those 75 and under, especially those 60 and under.

Those interviewed say that the irony remains that those who would be best served by LTCI coverage often have incomes too great to qualify for Medicaid, and must keep in mind that LTCI will not be paid for by Medicare.

And while there is some concern that the cost of premiums makes LTCI a difficult sale, experts also note that the average cost of a private room in a nursing home in the greater Dallas-Fort Worth area was as much as $5,500 per month, according to a MetLife survey.

Underwriting challenges also continue to vex potential LTCI enrollees. Agents say that as many as 30 percent of those who’d like to get LTCI coverage are denied policies due to weight issues.


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