How Long-Term Care Insurance Has Changed

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couple-in-libraryMany U.S. insurance companies have had challenges, to say the least, with their long-term care insurance product lines in the past decade and still desire how they can find some way to help consumers. 

A Washington-based insurer trade group commissioned a major consumer study by Waltham, Massachusetts-based LifePlans Inc., to look for ways to continue offering Long-Term Care Insurance.

The survey team interviewed 1,326 U.S. consumers who bought LTC insurance policies in 2015; of this number, 225 consumers, who had recently reviewed a policy, decided not to buy coverage; and 800 were randomly picked U.S. residents ages 50 and older.

The team also analyzed a sample of 8,791 LTC insurance policies purchased from seven different insurers.

Researchers compared the results from the 2015 interviews and 2015 policy analyses with the results from similar surveys and LTC insurance policy analyses conducted every five years since 1990.

One thing LifePlans found is broad consumer support for a number of policy proposals that insurers could support in Congress.

Only about one-quarter of the LTC insurance buyers, non-LTC-insurance buyers, and age 50-and-older Americans interviewed said they think the government should pay for long-term care services for all people, according to the LifePlans survey report.

But 86 percent of the LTC insurance buyers, 83 percent of the non-buyers, and 73 percent of the age 50-and-older Americans agreed that LTC insurance premiums should be “fully tax deductible.”

In Washington, one hot topic has been the idea of the government offering a universal catastrophic long-term care benefits program, aimed at people who need two or more years of care. The United Kingdom recently set up a similar public coverage care program for its residents.

LifePlans found that 55 percent preferred the idea of an extended public coverage care system and that 27 percent preferred the idea of the government offering an immediage public coverage care system, which would cover the first few years of care.

LifePlans also came up with information about trends in what LTC insurance policies are really like, what the buyers are like, and what the buyers and active non-buyers are thinking:


Issuers of long-term care insurance policies incorrectly evaluated how many policyholders would keep their policies long enough to file claims, and how long the claims would last. They also miscalculated what low interest rates would do to their investment earnings.

The insurance companies have dealt with the forecasting errors by asking state insurance regulators to approve rate increases.

The LifePlans policy analyses show how the same forces have pushed up the cost of new policies.

In 1990, 59 percent of the LTC insurance policies sold cost less than $1,000 per year, and just 9 percent cost $2,000 or more per year.

In 2015, only 5 percent of the policies sold cost less than $1,000 per year, and 64 percent cost $2,000 or more per year.

The average annual premium increased from $1,071 to $2,727.

Home health care

LTC insurance prices have increased partly because, in some ways, the policy benefits have improved.

The average duration of policy benefits fell to 4 years in 2015, from 5.6 years in 1990.

But the average daily benefit increased to $161, from $72, over that period.

Insurers also added home health care benefits.

Home health care benefits were so rare in 1990 that LifePlans did not track them that year.

In 1995, only 49 percent of the policies analyzed that offered home health benefits could pay for more than two years of care in the home.

The home health care benefit’s richness peaked in 2000; that year, the home health care benefits sold had an average duration of 5.4 years.

But home health care benefits were still better in 2015 than in 1995. In 2015, 79 percent of the policies that offered home health benefits could pay for more than two years of care, and the average home health care benefits duration was four years.

Personal characteristics

The average age of a buyer fell to 60 in 2015, from 68 in 1990. Over that same period, the percentage of purchasers ages 75 and older fell to 1 percent, from 17 percent.

In part because of the age shift, the percentage of buyers who are widowed fell to 7 percent, from 23 percent.

The percentage with a college degree increased to 68 percent, from 33 percent.

Financial characteristics

Between 1990 and 2015, the changes in LTC insurance buyer personal characteristics went hand in hand with changes in financial resources.

The percentage with annual income under $25,000 fell to 4 percent, from 42 percent.

The percentage with less than $75,000 in total liquid assets fell to 13 percent, from 47 percent. 

Buyer motives

LifePlans discovered that the younger, better-educated, higher-income LTC insurance buyers of 2015 had different goals than the 1990 buyers.

In 1990, 30 percent of the buyers wanted to avoid dependence on other relatives, and only 24 percent wanted to protect their assets or leave an estate to heirs.

In 2015, just 13 percent were worried about dependence, and 36 percent were worried about estate protection. 

Non-buyer motives

In spite all of the headlines about long-term care insurance price increases and market withdrawals, high prices may only be about as much of a barrier to today’s LTC insurance sales as they were in 1990.

LifePlans found that 51 percent of non-buyers cited “too costly” as a very important reason for not buying coverage in 2015, but 53-58 percent of the non-buyers also gave “too costly” as a very important reason for not buying coverage from 1990 through 2010.

The popularity of other barriers to buying LTC insurance fell much more dramatically.

In 1990, for example, 36 percent of the non-buyers were very skeptical about whether insurers would pay LTC insurance claims. In 2015, only 13 percent of the non-buyers gave skepticism about payment of claims as a reason for not buying coverage.

LifePlans added a new reason in 2015 for resisting LTC insurance with the uncertainty about whether a policy will cover the types of services a consumer might need. More than half of the consumers say uncertainty about whether a policy will cover the right services is a very important reason not to buy coverage.



If you are thinking about purchasing LTC insurance but have uncertainties, there are better alternatives with a viable solution for reasonable cost and excellent coverage. 

New Nursing Home Rules: Residents Control Their Care

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elderly-with-caregiver-thumbs-upAbout 1.4 million residents of nursing homes across the country now can be more involved in their care under the most wide-ranging revision of federal government rules for such facilities in 25 years.

The changes reflect a shift toward more “person-centered care,” including requirements for speedy care plans, more flexibility and variety in meals and snacks, greater review of a person’s drug regimen, better security, improved grievance procedures and scrutiny of involuntary discharges.

“With proper implementation and enforcement, this could really transform a resident’s experience of a nursing home,” said Robyn Grant, director of public policy and advocacy for the Consumer Voice, a national group that advocates for residents’ rights.

The federal Medicare and Medicaid programs pay for most of the nation’s nursing home care — roughly $75 billion in 2014 — and in return, facilities must comply with government rules. The new regulations, proposed late last year by Health and Human Services Secretary Sylvia Mathews Burwell, take effect in three phases. The first began in November 2016.

They allow residents and their families “to be much more engaged in the design of their care plan and the design of their discharge plans,” said David Gifford, a senior vice president at the American Health Care Association, which represents nearly 12,000 long-term-care facilities.

Grant goes even further, saying the new approach puts “the consumer in the driver’s seat.” Until now, she noted, a person’s care has too often been decided only by the nursing home staff. “And if the resident is lucky, he or she is informed about what that care will entail, what will specifically be done and who will do it.”

HHS reviewed nearly 10,000 comments on its draft proposal before finalizing changes. One controversial measure in the department’s final rule would prohibit nursing homes from requiring residents to agree in advance to have any disputes settled through a privately run arbitration process instead of the court system. The industry association objected, claiming that Medicare officials have authority only to regulate matters related to residents’ health and safety and that an individual’s rights to use arbitration cannot be restricted. The ban is on hold until the association’s lawsuit, to force the government to drop the provision, is decided.

Here are highlights of the requirements now in effect:

Making the nursing home feel more like home: The regulations say that residents are entitled to “alternative meals and snacks … at non-traditional times or outside of scheduled meal times.” Residents can also choose their roommates, which may lead to siblings or same-gender couples being together. And a resident also has “a right to receive visitors of his or her choosing at the time of his or her choosing,” as long as it does not impose on another resident’s rights.

Bolstering grievance procedures: Nursing homes must now appoint an official who will handle complaints and follow a strengthened grievance process. Decisions must be in writing.

Challenging discharges: Residents can no longer be discharged while appealing the discharge. They cannot be discharged for non-payment if they have applied for Medicaid or other insurance, are waiting for a payment decision or appeal a claim denial.

If a nursing home refuses to accept a resident who wants to return from a hospital stay, the resident can appeal the decision. Also, residents who enter the hospital have a right to return to their same room, if it is available.

A state’s long-term-care ombudsman must now get copies of any involuntary discharges so the situation can be reviewed as soon as possible.

Expanding protection from abuse: The definition of abuse now includes financial exploitation. Nursing homes are prohibited from hiring any licensed professional who has received a disciplinary action because of abuse, neglect, mistreatment or financial exploitation of residents.

Ensuring a qualified staff: Consumer groups had urged federal officials to set minimum staffing levels for registered nurses and nursing staff, but the industry had opposed any mandates and none was included in the final rule. Instead, facilities must have enough skilled and competent staff to meet residents’ needs. There are also specific training requirements in caring for residents with dementia and for preventing elder abuse.

“Competency and staffing levels are not mutually exclusive,” said Toby Edelman, a senior policy attorney at the Center for Medicare Advocacy. Person-centered care and other improvements “mean nothing if you do not have the staff who knows the residents … and can figure out why Mrs. Smith is screaming.”

Yet, requiring a certain number of nurses could backfire, said Gifford. “It could actually result in some places that are above those ratios by lowering their staffing levels, other places that would increase staffing when it is not necessary, and could be putting their resources into better care to meet the needs of the residents.”


Less Expensive Hearing Aids Over-The- Counter?

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man-talking-on-the-phoneImagine people walking around with stylish ear devices that amplify and clarify sound that connect wirelessly to smart phones, tablets, televisions and digital assistants such as Apple’s Siri or Amazon’s Alexa.

That day is coming, sooner than people may think.

Technology is already moving in this direction, and consumer marketers such as Samsung, Bose Corp., and Panasonic Corp. are reportedly readying new products of this kind.

They will be sold over the counter, to customers who will test their own hearing with cell phone apps or online programs and adjust sound parameters themselves.

The devices “will be widely used by senior people,” just as earbuds are used by younger people today, according to the Hearing Loss Association of America.

The Food and Drug Administration is moving forward. In December 2016 the agency made plans to take the necessary steps to propose a modification in their regulations to create a category of [over-the-counter] hearing aids.

In January 2017, the Federal Trade Commission announced  a major meeting on hearing health care to be held in April 2017. This agency played an important role in ensuring that consumers receive copies of eyeglass prescriptions. For the most part, that does not happen with hearing aids.

Whether agency priorities will change under the new Trump administration is not certain. But technology is developing rapidly under any circumstances.

Older adults with mild to moderate hearing loss, including aging baby boomers, are expected to be a prime market for a new generation of products joining hearing aid and consumer electronics audio technologies.

More than 40 percent of people over the age of 60 have some degree of hearing loss, mostly mild to moderate; that rises to 80 percent of people older than 80.

Yet only 20 percent of those with some degree of impairment use hearing aids because of their high cost (an average $4,700 per pair), the lack of insurance coverage (traditional Medicare does not pay for hearing aids), stigma, denial and difficulty navigating the hearing health system.

Hoping to expand access, the President’s Council of Advisors on Science and Technology came out in favor of low cost, over-the-counter hearing devices in October 2015. The National Academies of Sciences, Engineering, and Medicine seconded that recommendation in a major report on hearing health care published in June 2016.

Both organizations cite a growing body of research and linked hearing loss to cognitive decline, depression, the onset of dementia, falls, poor physical functioning and social isolation. The longer people delay seeking help, research suggests, the more at risk they become.

Several recent developments are of note as consumer electronics companies, hearing aid manufacturers, audiologists, physicians, consumer advocates and regulators prepare for a surge of new hearing devices and changes in the hearing health care system:

Removing Barriers

For 40 years, the FDA has required that adults be examined by a doctor before purchasing a hearing aid or sign a waiver noting that they did not want to take this step. In December 2016, the agency eliminated that requirement for people over the age of 18.

The National Academies of Sciences’ expert panel on hearing health had noted that the rule “provides no clinically meaningful benefit” and could discourage people from seeking care. Instead of seeing a physician, adults signed the waiver 60 to 95 percent of the time.

Still, limits on access to hearing aids exist: All states restrict distribution of these devices to certified audiologists, physicians and device specialists. And some states still require medical evaluations.

Proposed Legislation

Senators Charles Grassley, R-Iowa, and Elizabeth Warren, D-Mass., said in December 2016 that they would soon introduce new legislation endorsing over-the-counter hearing aids, sold without those restrictions.

Currently, six companies control nearly 98 percent of the hearing aid market in the United States, contributing to high prices. Nearly two-thirds of people with severe hearing loss — many of them elderly — report being unable to afford the devices. The cost is generally “bundled” with professional fees for evaluation, fitting and follow-up care.

The American Speech-Language-Hearing Association, an organization representing audiologists and speech-language pathologists, does not believe consumers can adequately self-diagnose hearing problems and opposes over-the-counter devices.

The American Academy of Audiology, which represents more than 12,000 audiologists, believes professionals should evaluate hearing loss but is taking a “wait and see stance” until the FDA proposes a regulatory framework.

Another audiologist group, the Academy of Doctors of Audiology, believes the benefits of expanded access to hearing devices outweigh the risks and supports over-the-counter products.

The senators plan to introduce their legislation, which asks the FDA to issue regulations ensuring the safety and effectiveness of these devices, in this new congressional session.

Creating Standards

One area of considerable confusion is the distinction between hearing aids and personal sound amplification products, known as PSAPs.

This is a wide category of products, ranging from cheap devices that help amplify sound to sophisticated devices that resemble hearing aids in all but their name. In some cases, companies are marketing the exact same device as a hearing aid and a PSAP, sold at different prices.

In 2009, the FDA drew a distinction between PSAPs and hearing aids based on their “intended use.” PSAPs were considered unregulated consumer electronics products for people with normal hearing who wanted to hear more sharply — for instance, during bird watching. Hearing aids were regulated and considered medical devices meant for people with hearing impairment.

But technological advances have brought the two categories closer. And it is well understood that people with hearing loss are using PSAPs as a cheaper alternative to hearing aids.

Going forward, the Academy of Doctors of Audiology, believes higher-end PSAPs will become over-the-counter hearing aids.

In the meantime, the Consumer Technology Association has prepared standards for PSAPs meant to make it easier for consumers to understand what they are buying. The standards, are under review at the American National Standards Institute and could be published as early as February 2017.

The intent is to provide a ‘Good Housekeeping Seal of Approval’ for PSAPs. Currently, there is no easy, standardized way to compare these devices.