Tag Archives: insurance industry

Long-term care insurance premiums jump

As the population ages and costs continue rising, paying for long-term care is a big issue for middle class families. Some say long-term care insurance can be a solution, but there are significant issues associated with these products.

In the Minneapolis Star Tribune, Jackie Crosby reports that, “Trapped between fast-rising costs for care and weak returns on their investments, insurers have been raising long-term care premiums by double-digit percentages in Minnesota and nationwide.

Long-term care coverage has been around since the 1970s, and gained popularity in the ’90s, when the government started offering tax incentives. According to Crosby, it’s getting more expensive now because of what one expert called “the perfect storm.”

Insurers set their rates on assumptions that some people would let their policies lapse. But people held on to policies longer than expected. And their claims are bigger because they’re living longer.

Low interest rates have had perhaps the biggest impact, because insurers planned to cover claims based on reserves they invested. When those investments fell short of expectations, insurers turned to policyholders to make up the difference.

State and federal officials see long-term care insurance as key to limiting the strain placed upon government health programs by America’s aging popular, Crosby writes, and they have thus “spent considerable energy trying to encourage the middle class to plan ahead with long-term care insurance, without much luck.”

The Obama administration last month scrapped the CLASS Act, a long-term care insurance program and major piece of federal health care reform. Minnesota launched a program in 2008 that allows median-income households that buy long-term care policies to shelter some assets if they apply for Medicaid. Still, only about 11 percent of people in the state have the insurance.

Even though the Medicaid program was designed as a safety net for people in poverty, middle-class seniors routinely deplete their assets and turn to the state.

In Minnesota, Medicaid pays about 40 percent of elderly long-term care. Costs could rise fivefold by 2035 to an “unsustainable burden” of $5 billion, according to a report last year from the Citizens League.

House calls on the rise as their economic benefits become clear

In The Miami Herald, Ana Veciana-Suarez looks into why doctor house calls are on the rise, especially among the Medicare set. Through her reporting, it becomes apparent that it’s primarily a function of economics, all driven by the fact that, while a house call may appear expensive when compared to a typical primary care visit, in many cases the real alternative to a house call and some preventative medicine is an emergency room visit and/or an overnight hospitalization, both of which are in another cost bracket entirely.

Veciana-Suarez writes that while the latest home care boom may have started with the growth of concierge medicine, especially in South Florida, it’s now being driven by the big guns — Medicare and major insurers.

House calls, once thought to be too time-consuming and not very cost-effective, are making a comeback as healthcare providers recognize that they’re actually the answer to good care for patients who can’t make it to a doctor’s office. Medicare-paid house calls have been steadily increasing, according to government figures, and doctors report the same for non-Medicare patients, according to the American Academy for Home Care Physicians. What’s more, technology has made accessibility to patients’ records and other medical information available at any time and any place, a boon to physicians on the go.

Now a three-year federal government pilot program called Independence at Home is encouraging doctors to pick up those black medical bags of yore and pay a visit to their sickest patients. As part of the new healthcare reform law, the demonstration project will cover 10,000 Medicare patients described as medically fragile. It is set to begin in January in locations yet to be decided.

The main targets for both the government and private insurance programs are the so-called “frequent fliers,” and others with chronic conditions that need to be managed to prevent repeat visits to the emergency room. To that end, some programs also include social workers and home health educators. Most programs are still in the experimental phase, but Veciana-Suarez paints a clear picture of a sector that’s poised to assume a growing role in the coming decade.