Long-Term Care (LTC) Innovations Subgroup
The Long-Term Care Innovations Subgroup was created at the request of Pennsylvania Insurance
Commissioner Teresa Miller. The subgroup is part of the National Association of Insurance
Commissioners (NAIC) Senior Issues Task Force (SITF). The general purpose of the subgroup is to
examine the future of long-term care (LTC) insurance and the private LTC insurance market.
The history of issues surrounding LTC insurance is well known. Fifteen years ago there were over 100
companies selling commercial LTC policies in the United States. Today, there are less than 20, many of
which are having financial difficulties.
The SITF has been and will continue to grapple with struggling legacy LTC products and the issues
around appropriate pricing of those products. However, equally important is the necessity to look
forward and think about the future of LTC insurance and the role the private market can and should play
in financing the LTC needs of our society.
The significant impact of LTC costs on state budgets through state Medicaid programs is well known.
This subgroup will examine and consider the role the private market could play in helping to mitigate
the impact of long term care costs on Medicaid. This is not to suggest that private LTC insurance is the
answer to the problem of how we as a society are going to finance the LTC needs of our citizens, but it
can be part of the solution. It is important to consider ways to improve the functioning of the private
LTC insurance market if private insurance is to truly be a meaningful part of the solution.
The scope, focus and goal of this subgroup is to consider ways we can address some of the current
challenges facing this market and perhaps develop realistic policy options that might result in an
increase in the take up rate of LTC insurance. This means addressing both the demand and the supply
side of the equation. Few consumers choose to purchase LTC insurance today and fewer and fewer
companies are selling LTC insurance products. One area of focus is to examine ways to increase the
consumer interest in finding a way to finance their potential LTC needs and increase the number of
insurance companies interested in developing products aimed at helping people finance their LTC needs.
Some of issues and questions the subgroup will consider and examine include the role for the private
insurance market in assisting people in financing their LTC needs; the steps that could be taken to
encourage more participation by insurance companies in this market; the future make up of LTC
insurance products; the types of products most appealing to consumers; the types of products insurance
companies would be interested in selling; the role employers should play in terms of offering products to
assist in financing LTC services; the legal and regulatory barriers that may need to be overcome to
improve the functioning of this market; and any federal or state actions that could help promote a better
functioning private LTC insurance market.
This subgroup will focus on the future and how to improve the private LTC insurance market. It is well
known that conversations about financing LTC have been going on for decades. There have been
numerous task forces and commissions charged with trying to find solutions to this problem. The
problem is also multi-faceted; some groups that have looked at this issue have focused on service
delivery, some on workforce issues, and some on public financing options. All of those are important
components of the larger conversation about financing LTC costs. But for the purposes of this subgroup
the more we focus on the private market financing aspect of the issue, the more likely we will be to
come up with realistic, actionable ideas for improving the private LTC insurance market.
In other words, this subgroup is not meant to simply be another group of people studying this very
complicated issue with a list of recommendations at the end of our deliberations that end up going
nowhere. The goal is to keep the focus on improving the private LTC insurance market through product
modifications, reduction of regulatory barriers, and appropriate incentives to create a stronger market.
Nor is it the intent of this subgroup to duplicate efforts of previous commissions, task forces and
working groups. Some of these groups, at least at some level, have studied and made some
recommendations related to improving the private LTC insurance market and their prior work should not
be ignored.
The subgroup will begin its work by hearing from speakers who have been thinking about ways to
improve the private LTC insurance market, many of whom participated in some of these previous LTC
studies. This will be helpful in focusing the discussions going forward, give the subgroup an
opportunity to learn from those who have been focusing on this issue and have ideas about ways to
improve this market, and begin our own discussions about how we might improve the LTC market and
help mitigate the costs of LTC on Medicaid budgets.