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Answers - Long Term Care Insurance circa 2007
When long term care insurance was first conceived and offered, back in the 1980's, most LTCi premium rates were much lower than today's policies. Why have they increased so much and why are long term care insurance companies raising premiums on existing policies?
Well, for one thing, many long term care ins
Well, for one thing, many long term care ins
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
urance polices today offer significantly more benefits than the old "nursing home only" policies. Due to consumer demand as well as consumer protection laws being passed, long term care insurance policies of today have less restrictions (As with any contract, always read the fine print!). The more an insuran
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
ce company has to pay out, the higher the premiums with be.
Other reasons, besides the all too prevalent inflation, are that long term care insurance companies had no previous actuarial data to crunch. For instance: How long would a person pay before going on claim? How many would die before collecting ben
Other reasons, besides the all too prevalent inflation, are that long term care insurance companies had no previous actuarial data to crunch. For instance: How long would a person pay before going on claim? How many would die before collecting ben
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
fits? How much money would the long term care insurance company need to pay out in claims? And finally, would the company's product sales and investments provide enough assets to keep them viable?
Insurance companies didn't have past experience with long term care claims, plus competition was stiff. As year
Insurance companies didn't have past experience with long term care claims, plus competition was stiff. As year
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
s ticked by, many companies offered more benefits while keeping their premiums quite low. Some even sold low-priced policies to people with health conditions that would likely lead to long term care. This was a big mistake.
My mother bought a low-balled policy that was packed with benefits. She paid about $1
My mother bought a low-balled policy that was packed with benefits. She paid about $1
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
500 a year for 5 years. After 3 year's worth of recent rate increases, her premium has more than doubled. As strokes and Alzheimers run in our family, we're hoping that the insurance company doesn't increase her premium many more times.
Are we upset that Mom's premium has increased so much? Yes and no. No
Are we upset that Mom's premium has increased so much? Yes and no. No
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
ne likes unexpected, unpleasant changes and certainly no one wants to pay more for insurance, but we do appreciate that she has been protected against catastrophic long term care costs all these years, whether she used the insurance or not.
Now some folks would call significant rate increases on an unsuspect
Now some folks would call significant rate increases on an unsuspect
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ing consumer fraud. But it's not. It IS quite unfortunate, but it's not fraud. If it were, the Department of Insurance in every state would shut the long term care insurance companies down.
Most LTCi companies simply did not have the foresight to charge enough money for their earlier policies. They guessed a
Most LTCi companies simply did not have the foresight to charge enough money for their earlier policies. They guessed a
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
t how much money they'd need to charge and they guessed wrong.
They're still trying to figure out how much they need to charge in order to maintain a healthy pool of money from which to pay claims, while still remaining competitive. The playing field keeps changing. Not the least of their problems is the ra
They're still trying to figure out how much they need to charge in order to maintain a healthy pool of money from which to pay claims, while still remaining competitive. The playing field keeps changing. Not the least of their problems is the ra
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
e of inflation in the long term care sector. LTCi companies have to pay out more money for equivalent care every year.
That's the insurance companies' point of view. But there are two sides to any story.
It does appear that some LTCi companies may have used unethical, but not previously illegal tactics.
That's the insurance companies' point of view. But there are two sides to any story.
It does appear that some LTCi companies may have used unethical, but not previously illegal tactics.
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
Companies sold low-priced policies to unhealthy people, then sold their LTCi business claiming financial duress due to too many claims. The original, "low-balling" company makes money while the new owner of the LTCi business is left to clean up the mess, and the policy holders face the unenviable choice of pa
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ying increasing rates or giving up their coverage.
Why do I say that companies, who didn't even have proper actuarial data, could be considered unethical for selling low-balled policies to unhealthy people? Well, because I've spoken with truly ethical, independent long term care insurance brokers who wouldn
Why do I say that companies, who didn't even have proper actuarial data, could be considered unethical for selling low-balled policies to unhealthy people? Well, because I've spoken with truly ethical, independent long term care insurance brokers who wouldn
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
t sell those companies' products unless there was no other way to insure a person. Even then, they'd make sure to let their client know that their rates would most likely increase in the future. These brokers could see what the future held, so why didn't the companies consider the future?
The problem is th
The problem is th
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
at it is difficult, if not impossible, to prove that an insurance company was aware of these concerns ahead of time.
Luckily for the consumer, there have been positive changes. Laws are being passed due to the frequent and high rate increases. Do your homework. Find out exactly what your state's laws are per
Luckily for the consumer, there have been positive changes. Laws are being passed due to the frequent and high rate increases. Do your homework. Find out exactly what your state's laws are per
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
taining to the sale of LTCi and the obligations of LTCi companies to their policyholders.
In Arizona, companies must offer their policy holders choices when premiums are raised. They can lower the amount of their original coverage in order to keep their premiums the same or they can stop paying their premium
In Arizona, companies must offer their policy holders choices when premiums are raised. They can lower the amount of their original coverage in order to keep their premiums the same or they can stop paying their premium
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
altogether. With the latter choice, the company creates a fund for the policy holder in the amount of the total premium payments paid to the company. That fund will pay for the policy holder's long term care until the money runs out. Of course, it does not take inflation into consideration.
My mother was
My mother was
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
given those 2 options this year when she received notice of (yet another) premium rate increase. Since she had only paid about $10,500 in premiums, which that would only cover a little over 3 months worth of long term care in a skilled nursing facility, she opted to keep her existing policy/premium. She was
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
lucky. She was able to afford the higher premium even though she is on a fixed income.
BTW, a few LTCi companies have not raised their rates. They offer very good, expensive policies, therefore reducing the possibility of future rate increases. Even with laws in place; inflation, a drastic increase in claims
BTW, a few LTCi companies have not raised their rates. They offer very good, expensive policies, therefore reducing the possibility of future rate increases. Even with laws in place; inflation, a drastic increase in claims
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
and how well a company's investments fare can contribute greatly to whether an LTCi company asks for rate increases or even remains viable.
Check your State's Department of Insurance to find out which companies have raised rates and also to see if any complaints have been made against a particular insurance
Check your State's Department of Insurance to find out which companies have raised rates and also to see if any complaints have been made against a particular insurance
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
company or agent. Check with the services like Weiss Research, Standard & Poor's, Moody's, AM Best and Duff & Phelps to research the financial status of any long term care insurance company.
In the end, you get what you pay for, so be sure to ask for decision assistance and quote comparisons from the online
In the end, you get what you pay for, so be sure to ask for decision assistance and quote comparisons from the online
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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