The coronavirus pandemic is affecting every line of
insurance including the long-term care (LTC) marketplace. This reading list
highlights Milliman articles and papers focusing on the various issues and
implications that LTC carriers and other stakeholders must consider due to the
- Impacts of COVID-19 on in-force long-term care insurance
By Jeff Anderson and Mike Bergerson
This paper examines the potential impact of COVID-19 on the LTC insurance industry based on a mortality case study. It focuses on in-force blocks of stand-alone LTC insurance in the United States.
- Pandemic risk on long-term care insurance reserves
By Andrew Dalton, Jeremy Hamilton, Al Schmitz, and Juliet Spector
The coronavirus pandemic will affect underlying LTC insurance cash flows. In this paper, Milliman actuaries provide a useful framework that can help carriers develop appropriate short- and long-term assumptions in order to project future cash flows.
The influence of “contagion” among spouses has been widely
studied and observed for everything from emotions and depression to dementia,
obesity, and mortality. Does spousal contagion affect long-term care (LTC)
Spouses often serve the role of informal caregiver, which
can result in both physical and psychological “wear down” effects that
eventually lead to LTC claims for the spouse providing the care. Alternatively,
when one spouse dies, the other may no longer be able to care for himself or
herself and may require formal LTC services.
Milliman consultants Al Schmitz, Ali Yeager, and Jeremy Hamilton studied LTC insurance claim data of married couples, where both spouses have LTC coverage, to examine the influence on claim incidence (or frequency of claim occurrence) for one spouse when the other spouse commences a claim or dies. The higher level of claim incidence in the presence of a contagion factor is significant. The consultants provide high-level results of spousal claim analysis and discuss potential implications to the LTC insurance market in their article “Is your spouse contagious?”
Estimating future claims usually entails using historical data as a starting point to develop an assumption about the future. Developing financial projections of long-term care (LTC) insurance utilization is similar. In this article, Milliman’s Jeremy Hamilton and Tim Kempen focus on two methods for using current utilization levels to develop utilization assumptions for future durations: an “average utilization” method and a “distribution” method. They also outline the advantages and disadvantages of both methods.