Members of a body that's trying to develop better ways to help people pay for long-term care are struggling with how to think about products that combine long-term care benefits with something else.
U.S. insurers already sell annuities that offer long-term care benefits, and life insurance policies that offer long-term care benefits, or similar benefits.
The Long Term Care Innovations Subgroup, a panel of regulators at the National Association of Insurance Commissioners, has talked about the possibility of encouraging the creation of other types of hybrids. The subgroup has suggested that an insurance policy could protect consumers against death or disability when they are young, then turn into long-term care insurance once the insureds are old.
(Related on ThinkAdvisor: Health-LTC multi-tools)
The subgroup has spent months holding conference calls and in-person meetings with long-term care insurance specialists, including representatives from actuarial firms, insurance agent groups and long-term care insurers.
The subgroup included several hybrid-related proposals in a federal policy options document.
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Create retirement plan-LTC hybrids, by helping consumers use individual or employer-sponsored retirement plan cash to pay for long-term care insurance.
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Encourage the development and sale of products that bolt long-term care benefits onto some other type of insurance chassis, such as term life or disability insurance.
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Set up some kind of Medicare-LTC hybrid program, by making long-term care insurance available through a new "Medicare Part E" program, or through the existing Medicare supplemental insurance program.
Here's a look at what some of the commenters said about the LTC hybrid proposals.
1. Center for Economic Justice
The Center for Economic Justice is one of dozens of groups that receive funding from the NAIC to speak for consumers in NAIC.
The center makes a point of trying to speak to low-income and middle-income consumers. In comments on the LTC policy options document, the center blasted any efforts to save stand-alone long-term care insurance, or any LTC planning tax breaks that might help high-income people more than low-income people.
"Stand-alone LTCI is a trouble product," the center says.
Policymakers should emphasize the idea of providing LTC financing through public insurance, the center said.
The center welcomes the idea of policymakers promoting private LTC financing through private hybrid insurance products. The center says it would even be open to the idea of the government offering tax incentives to purchasers of hybrid products.
The center also supports the idea of finding a way to add a home care benefit to traditional Medicare, to Medicare supplement insurance, or to Medicare Advantage plans.
2. America's Health Insurance Plans, American Council of Life Insurers
AHIP and the ACLI teamed up to submit a joint comment. They strongly support the idea of promoting the sale of new types of hybrids, but they are somewhat cooler toward hybrids than the Center for Economic Justice.
AHIP and the ACLI back the idea of building LTC benefits into disability insurance or term life insurance.
They crossed out the federal policy options provision calling for LTC benefits to be included within Medicare supplement policies.
