Malcolm Cheung Prudential Vice President of Long-Term Care Product and Risk Management

What significant changes have affected the long-term care category since we visited a year ago?   

One is the Obama Administration’s decision not to implement the Community Living Assistance Services and Support Act as part of health-care reform. In announcing the decision, Health and Human Services Secretary Kathleen Sebelius stated that “by 2020, we know that an estimated 15 million Americans will need some kind of long-term care and fewer than three percent have a long-term care policy.”  With the clear need for long-term care insurance coverage and no viable federal program for most Americans, the burden rests squarely on private insurers to continue to educate and on the American public to take action.

I’m happy to say that the work the industry has done to educate consumers about the importance of planning seems to be resonating.  We’re continuing to see the market expand and individual long-term care insurance sales increasing across the board.  This is a continuation of the positive trend that started in the beginning of 2010. 

How would you describe the impact of the 3 in 4 Need More campaign?

For years, insurers have been doing their best to educate the public about long-term care planning.   However, 3in4 Need More represents the first time that distributors and insurers have gotten behind a well-organized, concerted effort to provide greater awareness and education about LTC planning.   In many ways, this is the “Got Milk” campaign of the LTC world.  And it’s not just the LTC industry that is on board, as we’ve seen participation, sponsorship and support from outside the industry as well. 

Prudential is proud to not only be a sponsor, but the source for the name of the non-profit organization – 3in4 Need More.  Our 2011 consumer survey, “Long-Term Care Insurance: A Piece of the Retirement and Estate Planning Puzzle” found that about 3 out of every 4 Americans believe they should know more about long-term care insurance than they currently do.  

What can advisors do to (gently) help clients understand and appreciate the limitations of Medicaid as it relates to long-term care?

I’d start by saying that Medicaid may be the right long-term care solution for some people.  For example, those who have little or no assets to protect or those who don’t mind spending down what they do have, to poverty levels, may choose to rely on Medicaid.  However, for those people who have assets to protect, and who want choice and flexibility – in terms of how they spend their savings and where they receive care (e.g. near family, in a specific facility, etc.) – then private long-term care insurance would likely be a more suitable alternative.  

What’s the top item on your agenda for 2012?

Managing Prudential’s LTC business in a responsible, profitable manner.   We’re also looking to grow our business, and have been successful in that regard, but need to manage the business in a way that will ensure Prudential‘s long-term viability in the LTC insurance market.  On the product front, I’m very excited about our newest individual product, LTC Evolution. It’s truly innovative, we’re seeing momentum build, and what was excitement is now turning into measurable sales.  With Evolution, we believe we’ve found the right balance of features and price for many Americans and in 2012 we’ll be focusing more of our efforts on getting the remaining states to approve this product.  


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