The Long Term Care Innovation Subgroup will hear ideas for improving, and rescuing, private long-term care insurance at a public meeting Thursday.

The subgroup is bringing in the idea people from an long-term care insurance issuer, issuers of related products, two insurer trade groups, and a California consumer group that gets calls from panicked families when the families have long-term care insurance policy problems.

The Senior Issues Task Force, part of the National Association of Insurance Commissioners, an organization for state insurance regulators, started the subgroup in late 2015, to “examine the future of financing … including the role the private market should play.”

Related: 3 sips: State regulators’ huge LTCI report

One of the questions that comes up in the subgroup’s discussions is whether private long-term care insurance products can play a major role in long-term care finance, are fated to play a minor role, or are the unwanted, doomed results left over from a financial services experiment that failed.

The subgroup has already heard presentations from 13 long-term care insurance policy players during conference calls. Now, the subgroup is gearing up to listen to at least five speakers at the public meeting, which will be held in San Diego, in conjunction with the NAIC’s summer meeting.

For a look at some of what the subgroup could hear, based on the scheduled presenters’ written testimony and slidedecks, read on:

Royal Philips is one of many companies active in the home care market. (Photo: Royal Philips)

Royal Philips is one of many companies in the home care technology market. (Photo: Royal Philips)

1. Accommodate changes in how long-term care works.

Bonnie Burns, one of the scheduled speakers, represents Sacramento, California-based California Health Advocates, a group that publishes consumer health program education fact sheets and trains patient advocates.

She argues that any long-term care insurance products that exist should work properly, should be explained well to consumers, and should provide meaningful amount of benefits. She objects to the idea that “something is better than nothing” in the area of post-acute care benefits.

“No, it’s not, if the ‘something’ is not meaningful,” Burns writes in the written version of her testimony. “Paying premiums for a small amount of benefits or for short durations is a waste of scarce resources for a person who would otherwise become eligible for Medicaid. It also takes advantage of a near poor individual’s lack of knowledge about the social safety net.”

But Burns will repeat a suggestion, which she gave earlier, that private long-term care insurance policies should cover home monitoring systems and other electronic systems that can help caregivers ensure the safety of people with impairments who are living at home.

Burns also will talk about another idea: That newly designed long-term care insurance policies should eliminate the old coverage barriers between benefits for nursing home care, home care, community-based care, and other types of care, given the reality that how people get long-term care services could change.

“A new design should eliminate current distinctions on specific services and providers of care once an insured as met the benefit trigger, in anticipation of using these newer services, service delivery systems and providers,” Burns said. “Families should be able to make decisions about care needs and where and how those needs will be met with help from a certified care managers and with ongoing care coordination that should be part of the benefit package.”

Related: 7 ideas for improving long-term care insurance

The IRS has become a source of quiet but powerful personal insurance protection advice. (Photo: Allison Bell/LHP)

The IRS has become a source of quiet but powerful personal insurance protection advice. (Photo: Allison Bell/LHP) 

2. Add and expand tax incentives.

 

Susan Coronel, a long-term care insurance specialist at the Washington, D.C.-based America’s Health Insurance Plans, focuses on a need for tax incentives in her slidedeck.

When AHIP had Waltham, Massachusetts-based LifePlans, a consulting firm, survey 800 U.S. consumers ages 50 and older in 2015, 40 percent of the consumers said offering long-term care insurance purchase incentive tax incentives was the single most important action the government should take to encourage use of private long-term care insurance.

Nineteen percent said the ability to deduct the full cost of long-term care insurance premiums from taxable income would be the most important factor that would lead them to consider buying long-term care insurance coverage. 

Having the government expand long-term care insurance shopper education efforts could also help increase long-term care insurance sales, Coronel says. 

Related: AHIP Finds Only 3% Of LTC Claims Denied 

Pocket knife tool

John O’Leary says the same insurance policy can do two important jobs. (Photo: iStock)

3. Encourage the sale of life insurance policies that turn into long-term care insurance.

John O’Leary,, a North Andover, Massachusetts-based long-term care insurance marketing consultant, will talk about his idea for encouraging the sale of a term life insurance policy that would turn into a long-term care insurance policy that provides two years of coverage when the insured turn 65.

The convertible policy could appeal to middle-income families by giving them the kind of affordable life insurance protection they really need before they retire, along with affordable long-term care insurance benefits after they retire, O’Leary says.

Related: 3 traditional LTCI alternatives expedition reports

Schoonveld says consumers need to be able to mix and match LTC products. (Photo: Thinkstock)

Schoonveld says consumers need to be able to mix and match LTC products. (Photo: Thinkstock)

4. Bless the sale of policies that cover small amounts of post-acute care.

Steve Schoonveld, a Mansfield, Massachusetts-based actuary who works for Lincoln Financial Group, will say that regulators should recognize that consumers have different life events and need to fund long-term care arrangements in different ways.

“It is critical that regulations allow for purchasing slices of coverage over time and coordinating benefits between these policies,” Schoonveld says in his written testimony.

Related: 5 possible cures for what ails LTCI

For an applicant with chronic hepatitis, a limited-condition long-term care insurance policy could cover care needed due to reasons other than liver disorders. (Image: Thinkstock)

For an applicant with chronic hepatitis, a limited-condition long-term care insurance policy could cover care needed due to reasons other than liver disorders. (Image: Thinkstock) 

5. Allow the sale of ‘limited condition’ policies.

Rod Perkins of the Washington, D.C.-based American Council of Life Insurers says in his slidedeck that insurance regulators should consider letting insurers exclude certain conditions from long-term care insurance policy coverage. That way, insurers could sell long-term care insurance policies, with exclusions, to some consumers who are now classified as uninsurable.

Related: AALTCI to candidates: Talk about LTC policy

Life settlement firms buy rights to life insurance policy benefits from the insureds.

Life settlement firms buy rights to life insurance policy benefits from the insureds. (Photo: Thinkstock) 

6. Tell users of Medicaid nursing home benefits about the life settlement market.

Michael Freedman, president of Minneapolis-based GWG Holdings, a life settlement company, says one way states could conserve Medicaid nursing home benefits cash would be to encourage residents who are about to using the benefits to sell their permanent life insurance policies. A life settlement might free up enough cash to keep an aging insured at home or to avoid the need to use Medicaid nursing home benefits, Freedman says. 

Related:

Families of Alzheimer’s patients turn to life settlements

Ky. state Senate passes life settlement LTC bill

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