LTC Bullet: The 17th Annual Inter-Company Long-Term Care Insurance Conference: A Virtual Visit

Friday, April 7, 2017

Seattle—

LTC Comment: In case you couldn’t be there, today’s LTC Bullet provides a glimpse into an exceptional industry meeting convened last week in Jacksonville, Florida, after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a GA whose proprietary tools help advisors find and educate clients, reducing the “Ping-Pong” in the LTCi sales process. Help clients project their exposure to LTC risk, compare Combo vs. Stand-Alone LTCi easily, and make informed final decisions about buying LTCi in 15-20 minutes!  Change work-site LTCi sales from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of the Milliman Broker World LTCi Survey, one of Senior Market Advisor's 10 "Power People" in LTCi in 2007, & a past Chair of the Center for Long-Term Care Financing. Contact Claude at 800-999-3026, x2241 or claudet@targetins.com to ask questions or get references. ***

*** PAST IS PROLOGUE: The last time the ILTCI conference convened in Jacksonville, Florida was 2008 during the Center for Long-Term Care Reform’s “National LTC Consciousness Tour.” We parked the “Silver Bullet of Long-Term Care” right in front of the Hyatt Regency venue, stocked the fridge with refreshments, and opened the little Airstream trailer as a “hospitality suite” for all visitors. Check out our review of that year’s conference: “LTC Bullet: The Jacksonville LTCI Conference,” Thursday, March 20, 2008. ***

*** WE NEED YOU. Every time I attend a major industry conference like the one described in today’s LTC Bullet, I’m gratified by the many expressions of appreciation I receive for our work at the Center for Long-Term Care Reform. Thank you! But let me make this appeal, if you are receiving our content forwarded by others, please consider joining the Center on your own. The only thing that makes our contribution to improving long-term care financing policy possible, is the support we receive from our very special individual and corporate members. So, please, if you get value from our publications and you appreciate our advocacy on behalf of responsible LTC public policy, lend us your support by joining and contributing to the Center and our common mission. Contact Damon at 206-283-7036 or damon@centerltc.com. ***

 

LTC BULLET: THE 17TH ANNUAL INTER-COMPANY LONG-TERM CARE INSURANCE CONFERENCE: A VIRTUAL VISIT

LTC Comment: This year’s big LTC insurance industry conference with the theme “Navigating the Future” wrapped up last week at the Hyatt Regency in Jacksonville, Florida. Attendance was 868, down somewhat from the past two years, but the highest of any before that. The quantity and quality of sessions, as well as the opportunities for networking, not to mention the exhibit-hall food and drink, were as plentiful and rewarding as ever.

If you were lucky enough to attend this year’s conference, Christi Trimble urges you to complete the evaluation survey here. If you’d like to participate as a volunteer in next year’s program, contact Jim.Glickman@LifeCareAssurance.com.

What follows are some quick impressions of the sessions I attended. These are not a representative sample of the conference content as I visited almost exclusively the program’s “Alternative Solutions” track. Special thanks to Eileen Tell and John O’Leary for the hard work they expended to put together the sessions comprising the Alternative Solutions Track. The other tracks were Actuarial & Finance; Claims & Underwriting; Combination Products; Legal, Compliance & Regulatory; Management, Operations & Technology; and Marketing & Distribution. The conference also featured a vast exhibit hall and special “demo rooms” where companies could present their products and answer questions.

To find a list and description of all the sessions in all the tracks including links to the slide decks for many of the presentations, click here. You’ll be quickly impressed by the range and richness of the content. A smart phone app guided participants to all the sessions and enabled them to evaluate each presentation. 

This year’s keynote speaker, sponsored by Genworth, was Anat Baron, former head of Mike's Hard Lemonade, a change strategist and “disruptor.” Her bio calls her a “force of nature” and states “she spent her illustrious career moving at warp speed while shaping and defining the trends that form today's business world.” She turned around Mike’s Hard Lemonade by aiming its marketing at women who wanted something to drink out of a bottle while guys were quaffing beer. Her message to the LTCI industry? “Disrupt or Die: Reinvention in an Ever Changing World.” We live in a time of huge and rapid change. Facebook, Twitter, Skype, the Cloud, etc., are barely a decade old. Yet they’ve changed the world and how we survive, prosper or not in it. Social networking rules. Master it or expect failure and embarrassment (such as being identified in the audience as a flip-phone user or a non-texter.) Ms. Baron’s session was entertaining and interesting, but would have benefited from more effort on her part to apply her observations and analysis to the LTC insurance business and its challenges.

The first break-out session I attended was “Addressing Long-Term Care Around the World,” on the Actuarial and Finance track, with presenters Sam Gutterman, retired consulting actuary; Andrew Dalton, Milliman; and moderator Robert Eaton, also Milliman. Two key contributors to the Population Issues Working Group of the International Actuarial Association discussed the group's recent long-term care study. The study covered LTC delivery, experience, trends, and financing from around the globe. This session summarized the study’s findings and reviewed the LTC systems in several countries. Review the presenters’ slide decks here for all the details. In a nutshell, we’re not alone; the rest of the world is struggling with the same demographic challenges as the USA, including the age wave and the birth dearth.

Next came the perennial favorite ILTCI conference session “Who Buys LTC Insurance?... Why? (or Why Not)?” with the latest findings and reflections from 25 years of quinquennial analyses of the subject. Presenters Marc Cohen, Clinical Professor of Gerontology, University of Massachusetts; Susan Coronel, Executive Director, Product Policy, America's Health Insurance Plans; and Eileen Tell, Independent Consultant, ET Consulting, LLC recounted and opined about “changes in the LTC insurance market from the consumer perspective, and an empirical basis for projecting future trends.” Check out their slides here. Some highlights: Average age of purchase has leveled off at 60, down from 68. Buyers are using a smaller percentage of their income to purchase LTCI. Most important reason people buy? Consistently, to protect assets and estates. Financial planners surpassed agents as most influential in the purchase decision. But for choice of carrier, agents are most important. Cost is the main reason not to buy. Conclusions: educate and motivate people about LTC risks, costs and planning options; address concerns with premium costs; policy discussions and research on expanding the private market are relevant and necessary; critical role remains for public sector/government.

The next session I attended was “Washington State Initiative,” produced by Eileen Tell, with presenters Chris Giese, Principal and Consulting Actuary, Milliman; Pete Subkoviak, Senior Health Care Campaign Coordinator, SEIU 775; and John Wilkin, Senior Actuary, Actuarial Research Corporation. “The state of Washington is exploring the financial feasibility of a publicly financed LTC option, along with the feasibility of a public sector role in reinsurance risk pooling to support the private market.” Check out the presenters’ slides here. The basic idea is to charge a mandatory .49% extra payroll tax to fund a one-year front-end benefit of $100 per day, $36,500 maximum. The hope is to get people paying for LTC risk before they need care and to relieve Medicaid. I asked two questions. Did they analyze the economic impact of diverting so much money from the productive economy, i.e., savings and investment capital, into more government spending? Answer: No. Do they have any evidence of catastrophic long-term care spend down? Answer: only anecdotes, no empirical evidence. Conclusion: This is CLASS-lite, going nowhere.

Day 2 of the conference began for me in a session titled “Finding LTSS: New Options or New Confusions for Consumers Alternative Solutions.” This was a report on ASPE (US Department of Health and Human Services Assistant Secretary for Planning and Evaluation) focus groups and environment study of both public and private sector online resources that help people find LTC. Eileen Tell was the producer and a speaker joined by Anne Tumlinson of Anne Tumlinson Innovations, LLC. America’s system to connect people with needed LTC services is a mess. Families get no information or training. There is no hub to go to for home care; no entry point. Organizations are trying to come up with answers, but nothing is working. There is an opportunity to delay formal care use by simplifying and expediting access to home care. But need does not equal demand. Entrepreneurs and investors get frustrated and give up. See presenters’ slides here.
LTC Comment: What this session lacked was any comprehension or acknowledgement that government itself, the proposed solution, caused the dysfunction in the home care market in the first place. Medicaid made nursing home care virtually free in 1965, which relieved the public of LTC risk and cost and impeded development of a private market for home care as it simultaneously crowded out LTC insurance and home equity conversion to help pay for it. For home care access and funding, government has been and continues to be the problem, not the solution.

The morning of day two continued with “A Public Private Partnership: Catastrophic Public and Front-End Private LTC Insurance,” produced by Eileen Tell, with speakers Marc Cohen; Anne Tumlinson; and Gretchen Alkema, Vice President, Policy and Communications, The SCAN Foundation. Most of this session was Marc Cohen’s presentation of research he expects to publish with pro-public-funding, anti-LTCI analysts Judy Feder (Georgetown University) and Melissa Favreault (Urban Institute). After recounting dysfunctions in the LTC financing marketplace, specifically too little insurance for an eminently insurable risk, Marc turned to the argument in favor of a compulsory, backend, government-financed LTC insurance covering the catastrophic risk. We’ll have to wait for his forthcoming article to see the details, because listening to this presentation was like drinking from a fire hose and the detailed slides are embargoed until the article is accepted for publication. But one interesting new idea proposed is to soften the mandatory nature of this approach with an opportunity for people to opt out of the program. That keeps a semblance of voluntary choice while strongly nudging people toward participation.
LTC Comment: The basic flaw in this plan is that it ignores the role of Medicaid, long-term care financing’s elephant in the room. Marc characterized access to Medicaid LTC benefits as available only to people who spend down for care or hide assets. The much bigger problem is that most middle class and some affluent people qualify for Medicaid benefits without doing either, because of the program’s generous resource exemptions for home equity, IRAs, autos, term life insurance, prepaid burials, personal belongings, home furnishings, etc. As long as most people can ignore LTC risk, avoid premiums for private LTCI (or opt out of a semi-mandatory government program), wait to see if they ever need care and rely on Medicaid while preserving most of their wealth when they do, little will change. Brilliant work, Marc, but it’s all for naught unless and until you deal with Medicaid’s actual impact instead of depending on the myth of Medicaid spend down.

The next session I attended was “LTC Think Tank Innovations-Exploring Possibilities for Improving LTC Financing.” John O'Leary, president, O'Leary Marketing Associates; Vincent Bodnar, Chief Actuary, LTCG; and Eileen Tell presented. This session explored the 80 ideas, 15 key concepts and three main platforms or tracks generated by the multi-year “Long-Term Care Think Tank” project sponsored by the Society of Actuaries. Review their final report published a year ago here or read our analysis of it in LTC Bullet: Fuel for LTC Change. There is too much to say about this brilliantly conceived, masterfully executed project to cover it here, so I strongly urge readers to go to the source (above) and the presentation slides here to learn more. But just to give you the flavor, consider these five finalist concepts generated by the Think Tank:

  • Flex 401K: multipurpose savings to include long-term care
  • Family LTC Account: cover multiple family members in a single LTCI policy
  • Health Care Look Alike: A LTCI policy that looks like a health insurance policy
  • Health and LTSS Combination: Add LTC to Medigap and Medicare Advantage
  • Medicare LTC Benefit: Medicare LTC for all

All of these ideas are worth pursuing except the last which I’ve compared elsewhere to adding deck chairs to the Titanic after the incident with the iceberg.

The main conference program wrapped up with a provocative general session called “New President and Congress: Implications for Aging and LTC Finance,” produced by John O’Leary and Eileen Tell. Slides here. The program described it thus: “After a roller coaster year of debates and campaigning, we now face dramatic changes in the political landscape for 2017 and beyond. This session brings together some of the nation's leading political and policy experts to discuss the new President and Congress and the implications with respect to private financing, public programs and new initiatives for long term care.” Presenters were:

  • Bob Blancato President, Matz, Blancato, & Associates
  • Erik C. Komendant, Head of Federal Affairs and Public Affairs, America's Health Insurance Plans
  • Katherine Hayes, Director of Health Policy, Bipartisan Policy Center
  • Karen Smyth, President, Omnia Professional Services

Response Panel:

  • Rod Perkins Vice President of Insurance Regulation, American Council of Life Insurers (ACLI)
  • James Glickman, President and CEO, Lifecare Assurance Company
  • Paul Forte, CEO, Long-Term Care Partners
  • Anne Tumlinson, Founder, Anne Tumlinson Innovations, LLC Moderator

Overview

Blancato summarized key issues and who’s who in the Trump Administration and the new Republican-dominated Congress affecting health and long-term care policy. Scroll down to a summary here.
Komendant opined about what happened the week before with the collapse of Republicans’ ObamaCare repeal and replace bill. R governors pushed back against the American Health Care Act. It’s dead, move on.
Hayes wasn’t so sure, predicting the House would revisit repeal and replace this year, including Medicaid block grants, perhaps in budget negotiations. Restructure savings so they come five years out, i.e., beyond the next election, and R governors won’t care.
Blancato: Medicaid is bigger than Medicare now.

Much more give and take followed, but this was the essence I took away. The Trump win blew away predictability. Rs have to abolish ObamaCare or at least reform it and call the change “repeal and replace.” Whether handled in health reform or budget negotiations, Medicaid is too big to ignore.

This program was supposed to conclude with the audience voting via their smart phones on a poll of key questions about the current political state of affairs affecting long-term care. Unfortunately, the session ended before the questions were fully presented and the audience invited to respond. You can read the questions and the answer options in this slide, mostly at its end.

But the conference didn’t end there. Yet another reception and a “Game Night” followed. Next morning, a Predictive Modeling Workshop on the Actuarial & Finance Track began. As Joe Wurzburger, Staff Fellow, Health, Society of Actuaries explained it to me: “Predictive modeling is a method for utilizing massive quantities of data and advanced computing power to forecast outcomes. For long-term care insurance, it can be used for many purposes, including determining pricing assumptions, predicting claim utilization, or modeling certain policyholder behaviors.” The full-day session, consisting of hands-on exercises and presentations of big picture concepts, was sponsored by the Society of Actuary’s LTC Section and featured these presenters: Missy Gordon, Principal and Consulting Actuary, Milliman; James Berger, Economic Capital Actuary, Employers Reassurance Corporation; Joe Long, Assistant Actuary and Data Scientist, Milliman; and John Murdzek, Senior Experience Studies Actuary, Genworth.

See what you missed this year? Mark your calendars now: The 18th Annual ILTCI Conference will be held March 18 to 21, 2018 at the Paris Las Vegas with room rates of only $99. Details this summer at www.iltciconf.org. Anyone interested in exhibiting, who has not exhibited at the conference before, should let conference organizers know, so that they will receive the invitation in time to get the deeply discounted early bird rates.