Genworth Would Support Public/private LTCi
- Thread starter Arthur Rudnick
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we already have a public/private LTCi in over 40 states.
it's called the LTC Partnership program.
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Arthur Rudnick
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previously posted by Mr_Ed
"we already have a public/private LTCi in over 40 states.
it's called the LTC Partnership program"
And, how's that working out for you?
"we already have a public/private LTCi in over 40 states.
it's called the LTC Partnership program"
And, how's that working out for you?
McInerney I think is referring to States actually collecting premium for tail-end risk.
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Arthur Rudnick
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What I find interesting (and no surprise) is that he stated if states denied Genworth's rate increase requests, Genworth would leave the LTCi market.
That's the dilemma: If they're losing money (or have the potential to lose money) on a block of business, they need a rate increase in order to protect their reserves for future claims.
If they're denied an increase, they will likely pull their product from the state where they were denied, which has been done in the past.
Rate increases and the publicity generated by them severely hurts LTCi sales. If a carrier pulls out of a market, that hurts sales as well.
Not sure there's a viable solution.
Oh, there is one viable solution............
Hire actuaries that have a clue as to what they're doing. They've only been at it for 40 years, you'd think they'd get it right by now.
That's the dilemma: If they're losing money (or have the potential to lose money) on a block of business, they need a rate increase in order to protect their reserves for future claims.
If they're denied an increase, they will likely pull their product from the state where they were denied, which has been done in the past.
Rate increases and the publicity generated by them severely hurts LTCi sales. If a carrier pulls out of a market, that hurts sales as well.
Not sure there's a viable solution.
Oh, there is one viable solution............
Hire actuaries that have a clue as to what they're doing. They've only been at it for 40 years, you'd think they'd get it right by now.
i know that's what he meant.
but i was just pointing out that with PQP's the state is on the hook for the tail end through Medicaid. there already is a public/private partnership.
and, it is a great program in every state that allows less than a 5% compound to qualify as a PQP.
95% of the policies I've sold over the last few years, Arthur, are PQP's.
I like McInerney's idea.
It will work.
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Arthur Rudnick
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previously posted by Mr_Ed
I used to be a big proponent of Partnership policies. Up until 5 years ago, about 70% of my business was Partnership.
In NY there are Traditional policies and separate Partnership policies. Regardless of the benefits selected, there is no Partnership "back-end" on Traditional policies.
Today, only 25% of my business is Partnership. And, there's a few reasons for that:
The first is that the state mandates the minimum benefits. The mandated minimum for 2013 is $270/day and is set to rise to $280/day in 2014. Obviously (depending upon age) premiums are pretty high.
Also, up until this year, NY mandated that every policy for applicants through the age of 79 include a 5% cmp. inflation rider. So, at $280 & 5% cmp. Partnership premiums are pretty much out of control.
The state did recently allow new policies going forward to offer a 3.5% cmp option, but only 2 of the 5 companies in the Partnership have filed and been approved; MedAmerica & Mass Mutual. Mass Mutual has absolutely off-the-wall premiums, so MedAmerica is receiving just about all of the Partnership business.
A couple of other reasons have turned me off on Partnership policies.
In NY we offer 100% Asset Protection policies and although assets are protected, income is not. Yes, assets that produce income can be legally transferred at anytime without a look-back period, but social security and qualified pensions, including IRAs, 401Ks, 403Bs etc. cannot be transferred.
Most of the people that I deal with have qualified pension plans and many are substantial. If I deal with a couple and one has a substantial pension, once a spouse exhausts their benefits, just about 100% of that pension is going towards the cost of care. Many times, the community spouse is not left with enough income to maintain a lifestyle. The NY metro area is the home of $15,000, $20,000 & $25,000 a year real estate taxes.
And finally, in NY, for the most part Medicaid does not pay for home care or ALF. They only pay for nursing homes. So, if one is on home care claim for a few years, then exhausts their policy and enters the Medicaid system, the only way the state will pay is if the policyholder enters a nursing home. That's a tough conversation to have with an applicant.
For all other Partnership states, Partnership protection is a no-additional cost feature. As long as the inflation rider & minimum daily benefit mandates are met, dollar-for-dollar Partnership protection is automatically part of the policy.
But with that said, the NYS Partnership does offer 100% asset protection, which is a major feature and that can be turned into a pretty big selling point.
I used to be a big proponent of Partnership policies. Up until 5 years ago, about 70% of my business was Partnership.
In NY there are Traditional policies and separate Partnership policies. Regardless of the benefits selected, there is no Partnership "back-end" on Traditional policies.
Today, only 25% of my business is Partnership. And, there's a few reasons for that:
The first is that the state mandates the minimum benefits. The mandated minimum for 2013 is $270/day and is set to rise to $280/day in 2014. Obviously (depending upon age) premiums are pretty high.
Also, up until this year, NY mandated that every policy for applicants through the age of 79 include a 5% cmp. inflation rider. So, at $280 & 5% cmp. Partnership premiums are pretty much out of control.
The state did recently allow new policies going forward to offer a 3.5% cmp option, but only 2 of the 5 companies in the Partnership have filed and been approved; MedAmerica & Mass Mutual. Mass Mutual has absolutely off-the-wall premiums, so MedAmerica is receiving just about all of the Partnership business.
A couple of other reasons have turned me off on Partnership policies.
In NY we offer 100% Asset Protection policies and although assets are protected, income is not. Yes, assets that produce income can be legally transferred at anytime without a look-back period, but social security and qualified pensions, including IRAs, 401Ks, 403Bs etc. cannot be transferred.
Most of the people that I deal with have qualified pension plans and many are substantial. If I deal with a couple and one has a substantial pension, once a spouse exhausts their benefits, just about 100% of that pension is going towards the cost of care. Many times, the community spouse is not left with enough income to maintain a lifestyle. The NY metro area is the home of $15,000, $20,000 & $25,000 a year real estate taxes.
And finally, in NY, for the most part Medicaid does not pay for home care or ALF. They only pay for nursing homes. So, if one is on home care claim for a few years, then exhausts their policy and enters the Medicaid system, the only way the state will pay is if the policyholder enters a nursing home. That's a tough conversation to have with an applicant.
For all other Partnership states, Partnership protection is a no-additional cost feature. As long as the inflation rider & minimum daily benefit mandates are met, dollar-for-dollar Partnership protection is automatically part of the policy.
But with that said, the NYS Partnership does offer 100% asset protection, which is a major feature and that can be turned into a pretty big selling point.
