On September 27, 2017, the California LTC Insurance Task Force met for the third time with positive results!
Based on the last two meetings and the feedback received by the task force participants, DHCS (Department of Health Care Services) was able to distill the responses into four general areas to further explore:
1) Current/new policy design & financing (cost sharing)
2) Consumer Education/Outreach
The new goal of the “Task Force” is to find affordable options for moderate-income Californians to participate in the California Partnership for LTC Insurance programs and to create a system of care that’s responsive to changing needs.
Policy Design/Financing (cost sharing options)
- Match the current Partnership requirements to include reciprocity, no or reduce minimum daily benefit and more inflations flexibility.
- Reduce the current 5% compound inflation protection to allow offering 4% & 3% as well as reduce one required daily benefit from the current $210 per day (70% of the state’s ADPPR for NH Care which is in 2017 $300 per day) to “at least 50% of that annual number=$150 per day or lower.
- Make policies “more affordable”
- Create affordable, front–end coverage products that would cover the majority of Californians long-term care needs (according to the most recent Life Plans 2016 buyer/non-buyer National LTCI survey, 75% of non-buyers said they would have “reconsidered” buying this insurance if there was a “more affordable” “front-end” Private LTC insurance with a Public Catastrophic back-end option).
Can we say “Partnership for LTCI Insurance!
So, at this point regarding product design, I was asked to present my suggestions and here they are: (using the Genworth Element policy model)
- Product Type: Comprehensive, fully integrated pool of money approach:
- Daily Benefit: Of at least $150 per day, but Partnership Staff said they would be willing to go down as low as $120 per day.
- Elimination period of 90 days or less (still allowing companies to offer the waiver for Home Care as this option)
- 3% Compound inflation @ any age! (Partnership said they would allow 3%, 4% and 5% compounded)
- Ancillary Benefit feature (50 times your daily benefit for whatever your plan of care says you need i.e.:
- out of country
- Home modification
- Medical tracking/alert
- Caregiver training
- ….supportive devises designed to keep you at home for as long as possible.
Simple, clean and affordable!
Again, these are just suggestions for companies to consider. Companies can take their current policies with 3% compound and file right now! Yes! Genworth can just file 3% on its current CA Partnership and get approved now!!!
Consumer Education/Outreach (DHCS Recommendations)
- Follow California Earthquake Authority Model (blanket mail campaign to all homeowners)
- Include LTC education insert in DMV registration notification
- Targeted campaigns using different media (Papers, TV, Radio)
- Statewide Workshops/Seminars/Community Service announcements
- Interview insurers for state wide advertising campaigns.
- The goal would be to be launching b the end of first quarter 2019, Statewide!
- Speed up the policy review process for DOI Partnership filings (DHCS now pushing this!)
- Speed up regulations amendments and/or adoption process (DHCS now pushing this!)
- Draft legislation to allow 401(k) plans to be used as LTCI premium funding sources
Development of deep alliances with other organizations such as AARP, or the Alzheimer’s Association.
So, where do we go from here?
The two lead attorneys from the DOI, who review the LTCI policy filings have agreed to “expedite” all Partnership LTCI filings within 30-days of receiving the new LTCI product check list.
The California Partnership has agreed to contact all interested LTC companies in CA and invite them to participate and to file immediately. (within the next two weeks)
They will be informed that if their current policy already meets the “minimum” Partnership “new” offering of 3% compound inflation and simply modify their “Care Management” of TQ to Partnership that that product could be “quickly” reviewed and “Approved” for “Partnership Designation” or “Certification” by the early First Quarter of 2018 (two to three months away!)
All agents will be required to be “Certified.”
Don’t miss out the opportunity to attend one of our Partnership Courses in November or December and hear about the “New Plan Design Approach” for Partnership Sales, receive pre-approved point of sales fact sheets, info graphs and learn how, why and when to use/present them, as well as our new & updated course outline and much more!
Don’t miss out on the “Re-birth of the Long-Term Care Market” in California. Let’s rumble together in 2018!
Thanks to all of those who have expressed concerns and good thoughts as we have battled the fires here in our home office town of Sonoma, California. Our home and office were thankfully spared, but phone lines, internet and power are still experiencing difficulties. But all is Good!