1 An Update on the LTCi Market & The Increasing Value of Claims AdvocacyLinda A. Jahnke Jahnke Consulting and Long Term Care Alliance
2 Brief Overview of LTCi (past and present)1980’s to 2005 2005-Present Nursing Home ONLY Home Care Benefits (small) Assisted Living Emerging Significant Inflated Benefits Large/ or Unlimited Benefit Payouts Standardized Language Chronic Rate Increases Carriers Exiting the Market Comprehensive Benefits “One Pool” formula Assisted Living/Memory Care Inflated Benefits Grow Slower Premiums for women 60%+ Fewer Traditional Carriers Introduction Hybrid Products NH only- many of these polices on the market and the insureds are typically in their mid to late 90’s. Often these types of policies are hanging out in a folder someplace and although the insured thought at the time they would no need care at home, they are getting home care- thus the policy is useless. HC benefits can be confusing- especially old policies. They pay a percentage, they require a medicare approved HHC agency as opposed to a non-medical home care agency. Some old HC polices pay according to the diagnostic related groups and therefore the benefits are tied to the illness ALF- area of litigation. Old definitions of Nursing Home clearly fit the description of ALF, per the contract, but the companies fight paying for care in ALF siting the intent of the coverage was for a SNF only.
3 Traditional LTC Coverage “Pay as you go” policyShared Care Inflation Protection 5% Compounded vs. 3% Compounded vs. 5% Simple vs. BIO Step-up vs. Benefit Builder Home Care Dollars Skilled Nursing Home Dollars Assisted Living Dollars
4 Asset Based/LTC & Life Insurance
5 Sample Quote Traditional LTC VS Hybrid Female Age 50 & 60Traditional LTC- Mutual of Omaha $6K pr. mo. LTC Benefits $225K pool value (3yrs.+) 3% COLA 90 day EP Annual age 50 $4170 Annual age 60 $5450 Male premium 35% less than female Hybrid- Money Guard $6K pr. mo. LTC Benefit $300K Pool value (4 yrs.+) 3% COLA $144K Specified DB SPD Age 50 $94K SPD Age 60 $115K
6 Sample Quote Traditional LTC VS Hybrid Couples age 50 & 60Traditional LTC- Mutual of Omaha $6K pr. mo. LTC Benefit (each) $225K pool value (3yrs.+ each) 3% COLA 90 day EP Annual age 50 $4758 (combined) Annual age 60 $6135 (combined) Hybrid-Shared Couples Coverage State Life/One America $6K pr. mo. LTC Benefit UNLIMIMTED Pool value *** 2% COLA $ K Death Benefit (2nd death) SPD Age 50 $55K & $3072 annual SPD Age 60 $115K & $4500 annual
7 What is new for “Traditional LTC” in 2017More Hybrid sales syphoning the traditional LTC market John Hancock out of the traditional LTC market in February 2017 Genworth sale to China Oceanwide pending Rate increases on old block of business targeting - 5% compounded COLA Unlimited benefits Alternative options to rate increases offered Age of purchase dropping
8 The Role LTC Patient AdvocatePreparing the parent/spouse for accepting care Interface with the insurance company at every step of the claims process Recommend vetted care providers/settings that fit within the definitions of the contract language Transmit billing and reconcile monthly benefit payments Troubleshoot problems Follow the claimant through each recertification eval.
9 Common Problems With LTCi ClaimsWhen MCI (mild cognitive impairment) is not “severe” enough Who decides the level of severity? Do scores matter (Moca, Mini Mental)? Denial of need on the part of the claimant ADL loss is very subjective- (Typical trigger is 2 out of 5, 6, or 7 ADL’s) “Continual Human Assistance” or “Stand-By” Supervision Misunderstanding the importance of proper documentation Attending Physician Statements (boxes marked incorrectly) Incorrect calculation of deductible days Home care agency records incomplete To say that I feel somewhat dividing in my practice is an understatement. On one hand, I want all who can pre-plan for LTC expenses to do so, and in some cases a LTCi is the best option. On the other hand, the very nature of this product lends itself to significant hardship on the insured IF there is not someone to assist them with the claim. I get asked frequently if I can recommend this product with a clear conscious and I can say wholeheartedly yes….. The product is not the problem, it is the process that is broken.
10 Case Study – The Process Is CumbersomeMr. “H” is a Korean War veteran with MCI, spinal stenosis, anxiety, depression, neuropathy, CHF and incontinence. He is non-ambulatory and depends on his elderly wife to care for him. After he fell down the steps at his home, he decided to call his insurance company. He was denied benefits for home care because he did not complete the paperwork within the allowed time to submit the forms. The second time he filed a claim, he was denied benefits because he did not agree to permit an in home assessment required by the insurance company. He gave up. Mr. H’s family hired an advocate and in less than two months, the claim for home care benefits was approved retroactively to the previous year. His waiver of premium alone was over $6,000 in addition to back benefits for SNF and home care services. He is still on claim today.
11 Case Study – Benefit OversightMrs. “T” is in the advanced stages of Alzheimer's Disease. Her husband is the primary caregiver and called a home care agency to help him with his wife. When they realized Mrs. T. had LTCi they assisted the husband in filing the claim and suggested the benefits to be assigned to them. After about six months, the client was concerned that he did not know the outcome of the claim. The family’s advisor called for advocacy. It was confirmed that the agency was receiving clients’ credit card payment as an auto pay, in addition they were also receiving the full benefit from the insurance company. They were “double dipping.” The account was reconciled, assignment of benefits was cancelled, and a new agency hired. Mrs. “T” is still on claim.
12 Case Study 3- Cognitive Impairment OmittedMr. “L” purchased a group policy through his employer. Mr. L had emergency surgery to replace his aortic heart value. The surgery outcome was successful but Mr. L emerged with significant cognitive impairment. His LTCi policy does NOT recognize cognitive impairments as a trigger for home care benefits. In order for Mr. L to receive benefits for his home care, he would have to need “continual, human, physical assistance” with 2 of his ADL in order to qualify. Mr. L is physically able to do all things for himself, however he is totally unsafe to be left alone. The home care agency called to seek assistance with the claim. Currently over 6 months of advocacy with no success. Physical limitations still remain to be the trigger for advancing this claim.
13 Jahnke Consulting and Long Term Care AllianceLinda A. Jahnke Jahnke Consulting and Long Term Care Alliance Office Mobile