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Medical Underwriting In Long-Term Care Insurance: Market Conditions Limit Options For Higher-Risk Consumers.

ABSTRACT: A key feature of private long-term care insurance is that medical underwriters screen out would-be buyers who have health conditions that portend near-term physical or cognitive disability. We applied common underwriting criteria based on data from two long-term care insurers to a nationally representative sample of individuals in the target age range (50-71 years) for long-term care insurance. The screening criteria put upper bounds on the current proportion of Americans who could gain coverage in the individual market without changes to medical underwriting practice. Specifically, our simulations show that in the target age range, approximately 30 percent of those whose wealth meets minimum industry standards for suitability for long-term care insurance would have their application for such insurance rejected at the underwriting stage. Among the general population-without considering financial suitability-we estimated that 40 percent would have their applications rejected. The predicted rejection rates are substantially higher than the rejection rates of about 20-25 percent of applicants in the actual market. In evaluating reforms for long-term care financing and their potential to increase private insurance rates, as well as to reduce financial pressure on public safety-net programs, policy makers need to consider the role of underwriting in the market for long-term care insurance.

SUBMITTER: Cornell PY

PROVIDER: S-EPMC5127198 | biostudies-literature | 2016 Aug

REPOSITORIES: biostudies-literature

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Medical Underwriting In Long-Term Care Insurance: Market Conditions Limit Options For Higher-Risk Consumers.

Cornell Portia Y PY Grabowski David C DC Cohen Marc M Shi Xiaomei X Stevenson David G DG

Health affairs (Project Hope) 20160801 8

A key feature of private long-term care insurance is that medical underwriters screen out would-be buyers who have health conditions that portend near-term physical or cognitive disability. We applied common underwriting criteria based on data from two long-term care insurers to a nationally representative sample of individuals in the target age range (50-71 years) for long-term care insurance. The screening criteria put upper bounds on the current proportion of Americans who could gain coverage ...[more]

PMID: 27503976

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Project description:BackgroundSince 1991, there has been a series of reforms of the English National Health Service (NHS) entailing an increasing separation between the commissioners of services and a widening range of public and independent sector providers able to compete for contracts to provide services to NHS patients. We examine the extent to which local commissioners had adopted a market-oriented (transactional) model of commissioning of care for people with long term conditions several years into the latest period of market-oriented reform. The paper also considers the factors that may have inhibited or supported market-oriented behaviour, including the presence of conditions conducive to a health care quasi-market.MethodsWe studied the commissioning of services for people with three long term conditions - diabetes, stroke and dementia - in three English primary care trust (PCT) areas over two years (2010-12). We took a broadly ethnographic approach to understanding the day-to-day practice of commissioning. Data were collected through interviews, observation of meetings and from documents.ResultsIn contrast to a transactional, market-related approach organised around commissioner choice of provider and associated contracting, commissioning was largely relational, based on trust and collaboration with incumbent providers. There was limited sign of commissioners significantly challenging providers, changing providers, or decommissioning services.In none of the service areas were all the conditions for a well functioning quasi-market in health care in place. Choice of provider was generally absent or limited; information on demand and resource requirements was highly imperfect; motivations were complex; and transaction costs uncertain, but likely to be high. It was difficult to divide care into neat units for contracting purposes. As a result, it is scarcely surprising that commissioning practice in relation to all six commissioning developments was dominated by a relational approach.ConclusionsOur findings challenge the notion of a strict separation of commissioners and providers, and instead demonstrate the adaptive persistence of relational commissioning based on continuity of provision, trust and interdependence between commissioners and providers, at least for services for people with long-term conditions.

Project description:BackgroundSwallowing/feeding difficulty is a serious hidden health problem in the older population. Although oral intake services based on the degree of this difficulty have been provided and revised in Japanese public long-term care (LTC) insurance since 2006, their implementation has not been examined. We evaluated the impact of policy changes on these services.MethodsThe nationwide database of LTC service uses in Japan was analysed for three oral intake services: Enhanced Oral Function in daycare facilities whose users were slightly disabled, Maintenance of Oral Ingestion and Transition to Oral Ingestion from tube feeding in residential facilities. Data were extracted for each June from 2015 to 2020 when monthly usage of these services was aligned and each June from 2009 to 2020 for the proportion of users according to LTC insurance certification. The major policy changes were the addition of municipal provision in Enhanced Oral Function and a requirement for multidisciplinary collaboration in Maintenance of Oral Ingestion in 2015. The impact of the medical fee reduction for developing percutaneous gastro-tubing to Transition to Oral Ingestion was also examined.ResultsBetween 2015 and 2020, the use of Enhanced Oral Function and Maintenance of Oral Ingestion increased and Transition to Oral Ingestion decreased, resulting in a total increase in use of 275,000 times or approximately 5,000 times per 100,000 among all older adults with LTC insurance certification. Concerning the proportion of users' disability status, the major users of Enhanced Oral Function in 2020 were slightly disabled and independent older adults (70%, up from 55% to 2009). Regarding the major users of Maintenance of Oral Ingestion between 2013 and 2020, care-need level 5 (most severe) decreased by 11%, whereas the total of care-need levels 4 and 3 increased by 9%. The use of Transition to Oral Ingestion, which had been declining, showed a further decline after reduction of the medical fee for percutaneous gastro-tubing in 2014.ConclusionsDue to policy changes, Enhanced Oral Function and Maintenance of Oral Ingestion have increased in the number of use among slightly disabled persons. However, this increase may be insufficient given the hidden swallowing/feeding difficulty.

Dataset Information

Medical Underwriting In Long-Term Care Insurance: Market Conditions Limit Options For Higher-Risk Consumers.

Publications

Medical Underwriting In Long-Term Care Insurance: Market Conditions Limit Options For Higher-Risk Consumers.

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