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By Paul E. ForteChief Executive Officer
Long Term Care Partners, LLC
Long Term Care Discussion GroupWashington, D.C.
April 26, 2012
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TOPICS
• Background/Structure
• OPM Contracts
• The Claims Process
• Enrollment Growth
• Current Scene/Future Directions
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Origins
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• 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
8 Million Core Eligibles
The Federal Long Term Care
Insurance Program
270,000+ Enrolled
U.S. Congress
U.S. Office of Personnel Management (OPM)
• Director of OPM• Healthcare & Insurance• Office of Inspector General• Office of Communications• Financial/Actuarial
GAO, HHS, CBO, OMB, Treasury
Long Term Care Partners, LLC
Long-Term Care Insurance Industry
Long-Term Care Services & Supports
Sta
keho
lders
Sta
keh
old
ers
Annualized Premium: $428 Million Assets under Management: $3 Billion*
*as of March 31, 2012
Non-Profits & Advocates
John Hancock
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Federal Long Term Care Insurance Program (FLTCIP)
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• 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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• 146,400 affected with 5%-25% increase depending upon enrollee’s age at purchase
• Personalized options with landing spots
• Support via website and specially-trained 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
FLTCIP Special Decision Period, 2009 - 2010
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FLTCIP Open Season, April - June 2011
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• 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
– 100 % home health care
– Calendar days
– Stay-at-home benefit
– 500 Informal Care Days
• Higher daily benefit amounts ($100 - $450)
• 2-year benefit period
• 4% Automatic Compound InflationOption
• No catastrophic coverage limitation
• Enhanced home health care benefits
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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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• 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
FLTCIP Care Coordination
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AIA Presentation
Claims Activity
• 150 new claims and 50 information/referral calls a month
• 2,600 claims active
• 9,100+ claims opened (program-to-date)
• 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
Point of Service YTD
AIA Presentation
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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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AIA Presentation
FLTCIP Technology and Service Enhancements
•Online Consulting Tool
• Full application online•New secure personalized enrollee account and ability to make plan changes
•Enhanced security measures for protection of personally identifiable and personal health information
•Advanced fail-over plan to ensure continuity of administration
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Enrollment Growth
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2002 2003 2004 2005 2006 2007 2008 2009 2010 20110
25,000
50,000
75,000
100,000
125,000
150,000
175,000
200,000
225,000
250,000
275,000
FLTCIP Enrollment 2002 – 2011 *
2002 - 2003 Open Season
2011 Open Sea-son 45,000 enrollees
added
* Enrollment totals are net of lapse and terminations
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Electronic Acquisition Model
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Education & Decision Making - Web
LTC & LTC Insurance Basics
FLTCIP Product Features
Application Web Approximately
70% submitted online 80% in
Open Season
Eligibility
Online Consultant Tool
Cost of Care in your Area
Rate Quote Calculator
Solicitation Email
Email blast Direct clicks to
Full Underwriting
Abbreviated Underwriting
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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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