What You Need to Know
- The panel looking at LTCI wellness programs is the one that normally talks about reduced benefit option packages.
- LTCI issuers offer the RBO packages in place of premium increases.
- In a draft paper, the panel says some of the issues wellness programs raise relate to discrimination, consumer confusion and data privacy.
States insurance regulators are starting to think about the rules they should set when long-term care insurance (LTCI) providers add wellness programs for the insureds.
The Long-Term Care Insurance Reduced Benefit Options Subgroup, an arm of the National Association of Insurance Commissioners, has posted a draft LTCI Wellness Programs Issues discussion paper on its section of the NAIC’s website, under the Exposure Drafts tab.
Comments are due Sept. 5.
LTCG, a company that administers LTCI operations for many LTCI issuers, has been working with a startup, Assured Allies, to try to get more information about the insureds’ health and to try to take steps, such as providing hearing aids and preventing falls, to keep insureds from needing to use their LTCI benefits.
Most LTCI businesses are under severe pressure because of a combination of the effects of low interest rates on investment earnings and inaccurate assumptions the issuers made when they originally designed and priced the products. The issuers have responded by implementing large premium increases. The NAIC subgroup thinking about LTCI wellness programs focuses mainly on questions surrounding the reduced benefit options packages LTCI issuers often offer as an alternative to a large premium increase.
The subgroup says in the draft issues paper that LTCI wellness programs raise questions about fairness, discrimination, consumer confusion and data privacy.