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Prudential Long-Term Care Underwriting

Pat Flynn, RN, Clinical Manager, LTC Benefit Access and Underwriting

2IFS A106182 - 7/05

Underwriting Support

Hotline: 1-800-800-8542 (pre-qualifications only) Customer Service: 1-800-732-0416 (status) E-Mail account: LTCUnderwriting@Prudential.com Newsletter: FrontRunner Personal point of contact: assigned underwriter Medical conditions guidelines: revised September

2006 BrainShark:web based training

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Underwriting Guidelines

Eligible Population: 18 - 79 Use current age at time of application signature Do not backdate application Age automatically saved within 30 days of

birthdate Do not request to “save age” if applicant has

turned 80 by date of application

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Primary Requirements

AGE

<65

Medical Record

No**

Interview(FTF)

No**

65 to 71 Yes No**

72+ Yes Yes

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Underwriter Considerations

Cognitive status Functional capacity-ability to perform ADL’s,

IADL’s Medical conditions – may result in need for care

(falls, fractures, c/o pain/weakness) Multiple medical conditions - in combo are more

significant (DM with Heart Disease, CHF with angina) Multiple changes in medication Lab results

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Underwriter Considerations (Cont’d)

Treatment plans - PT/OT– Cardiac rehab, steroid injections, planned or

recommended procedures Chronological age vs. physiological age

– App may seem younger or older than actual age Frailty - more susceptible to illness/disease Independence factors

– Working, married with spouse in good health, active, driving and travel independently

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Determining Successful Applicant Questions

Unsteadiness or limping? Tremors (hands or face)? Shortness of breath while speaking or walking? Use of assistive devices? What type? Do spouses share in conversation or does one

speak for the other? Can he handle his IADL’s independently?

– Shopping, laundry, cooking, check book, transportation, etc.

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Determining Successful Applicant-AgentSurgery Waiting Period

Hip/Knee: 3 mos CABG-6 mos: 12-DM Angioplasty: 3 mos,

12-DM Pacemaker: 3mos,

12-DM Defibrillator: 12 mos Heart valve: 6 mos,

12-DM

Endarterectomy:3 mos, 12-DM

Back/Spine: 6 mos Fractures: 3 mos Pelvic fracture: 12 mos Surgery anticipated-

Postpone

Assumes completely recovered, no limitations to functionality or underlying disease

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Underwriting Risk-Low

Stable medical conditions Predictable clinical course No ADL/cognitive deficits Met stability interval-time from end of

treatment until signing of application Generally speaking low probability of

having significant ADL loss next 4-5 years

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Underwriting Risk-High

Unpredictable medical conditions Condition threatening to functional

independence Current ADL deficits Current Cognitive deficits Likely to require human assistance with

ADL’s within next 4-5 years

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UW Classes-Preferred

15% discount– Reward for good habits and lifestyles

Must answer “no” to: smoking past 36 months May not use multiple medications Must fall within Preferred height to weight

Guidelines (pg 83)– Leeway 5 - 8 lbs with no other medical history

Must answer “no” to: any history of specific medical conditions (pg 81-82)

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Underwriting Classes: Standard I

Generally ALL medical conditions that meet stability indicators– Specifically, minimum length of time required from

completion of any / all treatment for condition to the time an application is submitted

Diabetes controlled by diet and exercise ONLY Height to weight within guidelines Smoking less than one pack per day & have no

associated cardiac, respiratory or vascular/ circulatory conditions

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Underwriting Classes: Standard II

Congestive heart failure

Hodgkin’s Disease Leukemia Lymphoma Diabetes/ daily

medication

Chronic Obstructive Pulmonary Disease/ daily meds

Emphysema/ daily meds

Smoking one pack or more a day

These are the ONLY conditions that should be rated STANDARD II

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Disclosure / Appeals Process

Will consider appeal within 60 days of decline decision– To request an appeal:

Send name, policy #, SS#, DOB and reason for appeal request and/or access to records to LTC Underwriting Appeal:

– Fax: 877-773-9515

– Mail: 2101 Welsh Road Dresher, PA 19025

Request for disclosure of specific reason for decline is sent ONLY to applicant or physician

Appeal of decision may require supportive medical information from physician

After 90 days of original decline date requires new application if decision reversed

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Decision Terminology

Approved: as applied for Approved with modifications significance of risk

– Reduced daily max, reduced lifetime max, increase benefit waiting period, eliminate cash rider, change rating

– No additional Benefit increases allowed for 2 years Declined: risk is too great Declined with Reconsideration

– Generally has not met stability period; an offer to review another app at a specified later date

– Applicants 76 - 79 will seldom be offered reconsideration (greater possibility of decline in health)

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Decision Terminology (continued)

No reconsiderations are communicated to agent only

Approved as applied for– NO increases permitted

– Maximum benefits acceptable for risk

– No requests submitted for 2 years (full underwriting, attained age)

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Correspondence For Decline

Letter to applicant will be specific and focused based on medical condition/ impairment, results of testing, etc.

Copy of decline letter to producer as provided on application

Phone outreach

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Long Term Care Claim and Benefit Access Presentation

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The Definition of Long Term Care

Broad range of help one needs if unable to care for oneself due to PROLONGED illness or disability

Involves receiving assistance of another person to perform essential activities of daily living when those tasks can no longer be performed independently

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Six Activities of Daily Living

1. Bathing Washing oneself by sponge

bath; or in tub/ shower, including task of getting in or out of tub/ shower

2. Dressing Putting on and taking off ALL

items of clothing and any necessary braces, fasteners or artificial limbs

3. Transferring Moving in/out of bed, chair or

wheelchair

4. Toileting Getting to & from toilet, getting on

& off toilet, & performing associated personal hygiene

5. Continence Ability to maintain control of bowel

& bladder function or unable to maintain control of bowel or bladder function, ability to perform associated personal hygiene (caring for catheter or ostomy bag)

6. Eating FEEDING oneself by getting food

into body from a receptacle (plate, cup, feeding tube or intravenously)

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Defining Chronic Illness

Physical limitation preventing policyholder from performing without substantial assistance at least 2 ADL’s for at least 90 days/ Or

Severe cognitive impairment requiring substantial supervision to protect policyholder’s health or safety

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Certifying Chronic Illness

Loss of functional capacity (physical or cognitive) suggests appropriate care and developing a “plan of care”– NOT a chronic medical condition, or medical

diagnosis

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Types of Medical Conditions

Acute– Generally resolves within 90 days, short hospital

stay, rehab potential good

Chronic– Long-term, rehabilitation potential poor

Cognitive– May need redirection for safety and physical hands-

on assist for ADL’s, rehab potential poor

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Federal Law

Created and defined Tax Qualified Long-Term Care Policy Policies must define chronically ill individual as someone

certified by a Licensed Health Care Practitioner– May use Prudential LTC vendor for face-to-face assessment or own

physician (Pru will provide physician with certification forms) The chronically ill or disabled individual must need

SUBSTANTIAL ASSISTANCE with 2 ADL’s, and must be expected to last at least 90 consecutive days, OR individual must have a severe cognitive impairment requiring SUBSTANTIAL SUPERVISION

Under tax qualified policy, insurers must pay claims (for qualified long term care services) pursuant to a Plan of Care– Plan of Care is a document prescribed by a licensed health care

practitioner

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How Do We Certify Chronic Illness?

Gather objective documentation/substantiation from multiple sources

Observation of physical functioning– How well performs ADLs, how managed before and why

now cannot Use standard measurements of skills Tools and resources

– Face to face assessments, medical records from hospitals, rehab facilities, nursing home assessments, care plans, service levels, chronicity guides, medical disability advisors, hospice assessments, etc.

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Creating the Plan of Care

Maximize wellness, reduce dependency, conserve claimant’s pool of money– Type & intensity of services consistent with type & level of

actual need for substantial assistance– Optimizes claimant’s ability to regain partial or full

functional independence– Includes what care services are recommended, by whom,

frequency, duration– Supportive community resources– Restorative services– Assistive devices that foster independence– Caregiver support

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Summary

Determine what ADL or cognitive deficits exist and extent of deficits

Whether insured needs substantial assistance of another person

Need for substantial assistance last 90 consecutive days

Identify opportunities to restore/improve independence through ”plan of care”

Reduce dependency >reduced intensity of services >reduces claim

Protects claimants pool of money