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ILTCI Conference Attendees Soldier On

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Members of the long-term care insurance (LTCI) community gathered in Chicago Sunday with the understanding that the product is still trapped in the doghouse, and Alzheimer’s disease is still roaming around free.

The 2019 Intercompany Long Term Care Insurance Conference opened with Drinker Biddle, a law firm, sponsoring the lanyards that hold up the attendees’ badges, and serving deep dish pizza in the exhibit hall. Drinker Biddle notes in the brochure on its exhibit hall table that it can help LTCI issues with filing for rate increases, and coping with claim litigation.

Ryan Krueger, a securities analyst with Keefe, Bruyette & Woods, is preparing to talk Tuesday about why investors are skeptical about insurers’ LTCI blocks in general, and especially about morbidity improvement assumptions and other reserving assumptions.

Lawyers will be speaking at a panel Monday about a slowdown in LTCI rate increase litigation but an acceleration in LTCI claim dispute litigation.

(Related: LTC Hybrid Experience Looks Great: Milliman Actuaries)

Many longtime ILTCI Conference attendees care deeply about squeezing the most possible LTCI coverage out of the premium dollar, to protect families against the kind of financial devastation that a loved one’s 10-year stay in a nursing home can bring. They have been skeptical about the idea of offering clients long-term care hybrid products, based on life insurance policies or annuity contracts, that might lead to any decrease in protection against catastrophic LTC costs. This year, many presenters at the conference are talking about how to market and sell hybrid products.

But a continuing worry about catastrophic LTC risk surfaced today, at a meeting of the Society of Actuaries’ Long Term Care Insurance Section council.

The section is working on an update of an LTCI claims experience.

Phyllis Shelton, a longtime LTCI agent and sales trainer, asked council members when they’ll providing new claim duration numbers.

She said LTCI agents would love to see the actuaries break out separate claim numbers for claimants who collect benefits for at least one year.

“That’s the true claim,” she said, referring to the likelihood that many people with short-term claims are using benefits to recover from acute illnesses, while the people collecting benefits for more than a year are likely to be suffering chronic conditions.

Shelton cited an older study suggesting that a man who’s been on claim for at least a year will be using long-term care for an average of another 3.8 years, and that a woman who’s been on claim for at least a year will, on average, need about 4.7 more years of long-term care.

Jay Olshansky, a public health professor at the University of Illinois at Chicago, warned attendees at a session on long-term care medical issues against relying on past experience to think about what people’s future long-term care needs will look like.

“This is not going to be accurate,” Olshansky said. “It’s going to be much worse.”

One problem is that, by keeping conditions such as stroke and heart disease from killing people when those people are ages 65 through 85, medical society could soon help many more of those people live into their 80s or 90s, when the risk of those people having Alzheimer’s disease and other neurological problems will be very high, Olshansky said.

“Don’t accept that deal with the devil,” Olshansky said.

Society either needs to wait for advances that actually slow the overall aging process or avoid promoting advances that will lead to people having many more years of life shadowed by dementia, Olshansky said.

National Guardian Life Insurance Company is responding by continuing efforts to roll out its new stand-alone long-term care insurance policy.

Claude Thau, an actuary based on Overland Park, Kansas, talked about a tool he has developed to help agents warn clients about what the clients are still up against a system that can help estimate individual client’s long-term care expense risk, just as an online calculator might estimate a client’s retirement savings needs.

Thau showed, for example, that a typical client in her 50s who assumed the desired nursing home now costs about $9,000 per month might have a 19% chance of needing more than $500,000 worth of care.

OneAmerica, an LTC hybrid issuer, is trying to deal with the Alzheimer’s threat by attacking the threat.

The company is offering to pay $5 each, up to a limit of $5,000, for ILTCI Conference attendees who write about a personal experience with Alzheimer’s on a OneAmerica whiteboard, take a photo of the whiteboard, then post the photo on a social media stream, with the hashtags #ILTCI19 and #ENDALZ,

“Every dollar given benefits those affected by the disease, and is used to drive Alzheimer’s care, support and research,” the company said in a flier promoting the donation offer.

— Read Shift in Long-Term Care Planning Shapes ILTCI Meetingon ThinkAdvisor.

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