One piece of the healthcare reform bill, the CLASS Act, has attracted a lot of attention, though there’s already significant change afoot in long-term care (LTC) as an employee benefit. Employee Benefits News picks up on the story:
Before the Community Living Assistance Services and Supports Act folded into landmark health care reform legislation raised public consciousness of long-term care insurance, LTC got a shot in the arm with provisions of the Pension Protection Act (PPA) that took effect this year.
So-called combo long-term care products, which blend LTC with annuities and life insurance, could be popularized under changes to the PPA because of clearer pricing. Carl Friedrich, a consulting actuary and principal for Milliman, also has noted that the LTC portion of a combo plan often costs 35% to 50% of standalone coverage.
Long Term Care
Carl Friedrich, LTC
A new article in Investment News looks at long-term care premium increases. Here’s an excerpt:
The magnitude of the coming rate hikes will vary according to the type of coverage and the client’s experience in the pool, said Allen Schmitz, principal and consulting actuary at Milliman Inc.
Holders of richer LTC policies offering inflation protection or lifetime benefits could face higher rate hikes because more of them than expected are holding on to their policies and beginning to make claims, he said.
Read the full article here.
Cost, Long Term Care
Al Schmitz, LTC
We have blogged before about adverse selection risk in reform proposals. A proposal in the House and Senate healthcare reform bills, the CLASS Act, establishes a federal long-term care (LTC) program financed from participant premiums without any federal subsidy. The new LTC program is subject to guaranteed issue, and that, combined with its voluntary nature, subjects the CLASS Act to considerable adverse selection risk. This paper by Al Schmitz examines this risk while considering other likely consequences.
Long Term Care, Reform
Al Schmitz, CLASS Act, LTC
Recent Comments