Long Term Care Discussion Group
Washington, D.C.
April 26, 2012
By Paul E. Forte
Chief Executive Officer
Long Term Care Partners, LLC
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TOPICS
• Background/Structure
• OPM Contracts
• The Claims Process
• Enrollment Growth
• Current Scene/Future Directions
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Origins
• 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
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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
John Hancock
U.S. Congress
•
•
•
•
•
Director of OPM
Healthcare & Insurance
Office of Inspector General
Office of Communications
Financial/Actuaria l
The Federal
Long Term Care
Insurance Program
270,000+ Enrolled
GAO, HHS, CBO, OMB,
Treasury
Stakeholders
U.S. Office of Personnel
Management (OPM)
Stakeholders
8 Million Core Eligibles
Long Term Care
Partners, LLC
Long-Term Care
Insurance Industry
Non-Profits & Advocates
Annualized Premium: $428 Million
Assets under Management: $3 Billion* Long-Term Care Services
*as of March 31, 2012
& Supports
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Federal Long Term Care Insurance Program (FLTCIP)
• Enrollees subject to medical
underwriting standards
• Uniform across all states
• Premiums 100% voluntary
• Care Coordination
• International Benefits
• Assets held in separate
account
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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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FLTCIP Special Decision Period, 2009 - 2010
• 146,400 affected with 5%-25%
increase depending upon enrollee’s
age at purchase
• Personalized options with landing
spots
• Support via website and speciallytrained 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
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FLTCIP Open Season, April - June 2011
• 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
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FLTCIP 2.0: New Benefits and Features
• Higher daily benefit amounts
($100 - $450)
– 100 % home health care
– Calendar days
– Stay-at-home benefit
• 2-year benefit period
– 500 Informal Care Days
• 4% Automatic Compound Inflation
Option
• 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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FLTCIP Care Coordination
• 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
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Claims Activity
• 150 new claims and 50
information/referral calls a month
• 2,600 claims active
• 9,100+ claims opened (program-to-date)
AIA Presentation
• 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
AIA Presentation
Point of Service YTD
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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FLTCIP Technology and Service Enhancements
•Online Consulting Tool
• Full application online
•New secure personalized enrollee
account and ability to make plan
AIA changes
Presentation
•Enhanced security measures for
protection of personally identifiable
and personal health information
•Advanced fail-over plan to ensure
continuity of administration
Enrollment Growth
FLTCIP Enrollment
2002 – 2011 *
2011 Open Season
45,000 enrollees
added
275,000
250,000
225,000
2002 - 2003
Open Season
200,000
175,000
150,000
125,000
100,000
75,000
50,000
25,000
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
* Enrollment totals are net of lapse and terminations
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Electronic Acquisition Model
Solicitation
Email
Education & Decision Making - Web
LTC & LTC Insurance
Basics
Full
Underwriting
Eligibility
Email blast
Direct clicks to
FLTCIP Product
Features
Online Consultant
Tool
Cost of Care in your
Area
Application Web
Approximately
70% submitted online
80% in
Open Season
Abbreviated
Underwriting
Rate Quote
Calculator
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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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