by paul e. forte chief executive officer long term care partners, llc long term care discussion...
TRANSCRIPT
By Paul E. ForteChief Executive Officer
Long Term Care Partners, LLC
Long Term Care Discussion GroupWashington, D.C.
April 26, 2012
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TOPICS
• Background/Structure
• OPM Contracts
• The Claims Process
• Enrollment Growth
• Current Scene/Future Directions
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Origins
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• Early LTCI policies: Medicare model/prior hospitalization
• Second generation individual policies• Employer Group plans for associations, state
governments, universities, labor unions, other
• Proctor & Gamble, IBM, GE, AT&T, and Fortune 500 market
• CalPERS LTCI Program
• Small group and work-site policies
Long Term Care Security Act of 2000 (PL 106-265)
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Federal Long Term Care Insurance Program (FLTCIP)
• Created by Long Term Care Security Act of 2000 (PL 106-265)
• Oversight by Congress
• Sponsored and Regulated by U.S. Office of Personnel Management (OPM)
• Master Contracts for seven years
• Fully Insured
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FLTCIP: A Public-Private Partnership
8 Million Core Eligibles
The Federal Long Term Care
Insurance Program
270,000+ Enrolled
U.S. Congress
U.S. Office of Personnel Management (OPM)
• Director of OPM• Healthcare & Insurance• Office of Inspector General• Office of Communications• Financial/Actuarial
GAO, HHS, CBO, OMB, Treasury
Long Term Care Partners, LLC
Long-Term Care Insurance Industry
Long-Term Care Services & Supports
Sta
keho
lders
Sta
keh
old
ers
Annualized Premium: $428 Million Assets under Management: $3 Billion*
*as of March 31, 2012
Non-Profits & Advocates
John Hancock
Federal Long Term Care Insurance Program (FLTCIP)
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• Enrollees subject to medical underwriting standards
• Uniform across all states• Premiums 100% voluntary
• Care Coordination • International Benefits• Assets held in separate account
FLTCIP 1st Contract
• OPM awarded first 7-year FLTCIP contract to John Hancock and MetLife in December 2001
• Initial Early Enrollment Period in March 2002. Main enrollment period (July 2002 through January 2003)
• Largest national marketing campaign on LTCI to date
• 197,000 enrollees after 1st Open Season
• 225,000 enrollees by contract end (Sept. 2009)
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FLTCIP 2nd Contract
• OPM awarded second 7-year FLTCIP contract to John Hancock in May 2009
• Adoption of new 2.0 plan; increase for ACIO enrollees in 1.0 plan
• Special Decision Period: August 2009 through April 2010
• 2nd Open Season: April 4, 2011 through June 24, 2011
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• 146,400 affected with 5%-25% increase depending upon enrollee’s age at purchase
• Personalized options with landing spots
• Support via website and specially-trained customer service representatives
• Special rate quote unit for other options
• 45% choose options to avoid increase; 43% choose to stay in 1.0 and pay increase
FLTCIP Special Decision Period, 2009 - 2010
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FLTCIP Open Season, April - June 2011
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• Open Season: April 4, 2011 – June 24, 2011
• First abbreviated underwriting opportunity for non-enrolled applicants since 2002
• More than 45,000 new people enrolled (20% increase)
• 70% of enrollments electronic
FLTCIP 2.0: New Benefits and Features
– 100 % home health care
– Calendar days
– Stay-at-home benefit
– 500 Informal Care Days
• Higher daily benefit amounts ($100 - $450)
• 2-year benefit period
• 4% Automatic Compound InflationOption
• No catastrophic coverage limitation
• Enhanced home health care benefits
FLTCIP: Home Health Care
• Reimbursed at 100% of Daily Benefit from $100 to $450 per day
• Formal care by Home Health Agencies• Adult day care• Respite Care• Informal care by friends, neighbors, and family members
• Stay-at-home benefits• Care planning visits• Home safety check• Emergency medical response systems• Durable medical equipment• Caregiver training
*Does not reduce maximum lifetime benefit
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• Registered nurses, with clinical experience, act as single point of contact
• Available for enrollees, and their qualified relatives, even if not enrolled
• Assessment, planning, service coordination, and counseling
• Dedicated resources assigned to each case
• Thoughtful utilization of benefits
• Claimants’ Satisfaction Level: 98% (+) since Program’s start
FLTCIP Care Coordination
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AIA Presentation
Claims Activity
• 150 new claims and 50 information/referral calls a month
• 2,600 claims active
• 9,100+ claims opened (program-to-date)
• 7,100 in benefit (program-to-date)
• Program currently paying over $6 million each month in claims
• Only cases of rescission have actually gone to court; no cases pending
Point of Service YTD
AIA Presentation
Independent Third Party Review
• Benchmark for consumer protection
• In cases of disputed eligibilities or claims, after denial of appeal, file may be submitted to independent third party for evaluation
• Third Party decision is binding
• Five Independent Third-Party Reviews, none of which have gone
to court
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AIA Presentation
FLTCIP Technology and Service Enhancements
•Online Consulting Tool
• Full application online•New secure personalized enrollee account and ability to make plan changes
•Enhanced security measures for protection of personally identifiable and personal health information
•Advanced fail-over plan to ensure continuity of administration
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Enrollment Growth
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2002 2003 2004 2005 2006 2007 2008 2009 2010 20110
25,000
50,000
75,000
100,000
125,000
150,000
175,000
200,000
225,000
250,000
275,000
FLTCIP Enrollment 2002 – 2011 *
2002 - 2003 Open Season
2011 Open Sea-son 45,000 enrollees
added
* Enrollment totals are net of lapse and terminations
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Electronic Acquisition Model
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Education & Decision Making - Web
LTC & LTC Insurance Basics
FLTCIP Product Features
Application Web Approximately
70% submitted online 80% in
Open Season
Eligibility
Online Consultant Tool
Cost of Care in your Area
Rate Quote Calculator
Solicitation Email
Email blast Direct clicks to
Full Underwriting
Abbreviated Underwriting
Long Term Care: Current Scene
• Total paid costs for LTC exceeded $250 billion in 2009
• Call for review of major entitlements in view of budget deficits, long-term debt
• Longer life expectancy
• 78 million baby boomers entering retirement
• Millions of boomers under-saved, unprepared for retirement
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Long Term Care: Future Directions
• Investment environment likely to remain challenging, volatile
• Self-insurance through savings, annuities, reverse mortgages
• Private LTCI most reliable form of protection
• More public-private partnerships likely
• Efforts to curb Medicaid costs
• Renewed attention to Medicare
• FLTCIP, other large-scale employer-based programs,
preferred LTCI delivery models
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