Category Archives: Long Term Care

Calculating LTC utilization assumptions

Utilization is a key aspect of long-term care (LTC) insurance assumptions that can impact insurers’ pricing, profitability, and reserves. Several nuances can make it challenging to develop and set appropriate utilization assumptions. In the article “Utilization: Long-term care’s ‘middle child’,” Milliman actuaries Mike Bergerson and Michael Emmert discuss some factors involved with calculating utilization and how they affect LTC reserves.

Improving financial projections for long-term care insurance with predictive analytics

In the world of long-term care (LTC) insurance, making financial projections is challenging for two main reasons: a long projection horizon and complex interactions. This article by Milliman actuaries Missy Gordon and Joe Long walks through the progression from developing LTC projection assumptions using traditional methods to doing so using predictive analytics.

This article was originally published in the December 2017 issue of Long-Term Care News.

Tax reform considerations for the LTC industry

What effects will the new tax reform law have on long-term care (LTC) insurance and other long-tailed health business? That is a question many actuaries are considering as they hurry to understand how it may affect these lines of business. In this article, Milliman’s Andrew Dalton and Al Schmitz provide an actuarial perspective concerning the immediate implications of the tax law. The authors also discuss how the law may alter the LTC marketplace broadly over the coming years.

LTC rate increase process for stakeholders to consider

In September 2016, Milliman actuaries Missy Gordon and Amy Pahl published a report entitled “Long-term care rate increase survey.” The results of the survey provide insurers, state regulators, and other stakeholders with some strategies and approaches to filing long-term care (LTC) rate increases. All but two of the 26 companies that participated in the survey filed for at least one LTC rate increase.

Gordon and Shawn Stender recently summarized the report in the April 2017 issue of Long-Term Care News. In the article, the authors highlight several questions that companies and regulators frequently ask regarding LTC rate increases. They also provide answers based on their experience and the LTC survey results, which are grouped into a three-step process.

Recouping past LTC policy losses

The National Association of Insurance Commissioners (NAIC) is continuing to ensure that past long-term care (LTC) insurance losses are not recouped through rate increases. Some regulators have asked LTC companies to justify premium rate increases in part by assuming that the proposed rate increase had been in place from the beginning. However, an NAIC task force ultimately decided that this reasoning added pricing risk by not allowing companies to seek the appropriate premiums levels needed to maintain the future financial health of LTC policies. In his article “Recouping past LTC losses,” Milliman consultant Robert Eaton provides examples illustrating how this pricing risk may influence claims losses in future years. He also offers perspective on the NAIC’s LTC Model Regulation update.

Level vs. relative premium increases and their effect on actuarial equivalence in long-term care insurance

The long-term care insurance industry continues to look for ways to manage disparities between premiums and costs. Premium increases and benefit reductions are likely to remain major factors in business decision-making. Insurers must carefully consider the impact of rate changes on their bottom line—not just in terms of raw numbers, but in how they relate to experience and the potential for future profits or losses across the spectrum of benefits. Milliman actuaries Mike Bergerson and John Hebig provide some perspective in this article.

This article was originally published in the April 2017 issue of Long-Term Care News.