An Update on the LTCi Market
& The Increasing Value of Claims Advocacy
Linda A. Jahnke
Jahnke Consulting and Long Term Care Alliance
Brief Overview of LTCi (past and present)
1980’s to 2005
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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
2005-Present
• Comprehensive Benefits
• “One Pool” formula
• Assisted Living/Memory Care
• Inflated Benefits Grow Slower
• Premiums for women 60%+
• Fewer Traditional Carriers
• Introduction Hybrid Products
Traditional LTC Coverage
“Pay as you go” policy
Shared Care
Inflation Protection
5% Compounded vs.
3% Compounded vs.
5% Simple vs.
BIO Step-up vs.
Benefit Builder
Home Care Dollars
Assisted Living Dollars
Skilled Nursing Home
Dollars
Asset Based/LTC & Life Insurance
Sample Quote Traditional LTC VS Hybrid
Female Age 50 & 60
Traditional LTC- Mutual of Omaha
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$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
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$6K pr. mo. LTC Benefit
$300K Pool value (4 yrs.+)
3% COLA
$144K Specified DB
• SPD Age 50 $94K
• SPD Age 60 $115K
Sample Quote Traditional LTC VS Hybrid
Couples age 50 & 60
Traditional LTC- Mutual of Omaha
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$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
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$6K pr. mo. LTC Benefit
UNLIMIMTED Pool value ***
2% COLA
$145-155K Death Benefit (2nd death)
• SPD Age 50 $55K & $3072 annual
• SPD Age 60 $115K & $4500 annual
What is new for “Traditional LTC” in 2017
• More 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
The Role LTC Patient Advocate
• Preparing 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.
Common Problems With LTCi Claims
• When 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
Case Study – The Process Is Cumbersome
• Mr. “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.
Case Study – Benefit Oversight
• Mrs. “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.
Case Study 3- Cognitive Impairment Omitted
• Mr. “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.
Linda A. Jahnke
Jahnke Consulting and Long Term Care Alliance
[email protected]
www.jcltca.com
858-513-8351 Office
858-740-0014 Mobile