Letters: Group LTC Plans Have Long Been In The Market

We know of large group LTC plans that, over nine years, have been offering either self-funded (with or without stop-loss) or fully insured plans that are all experience-rated. All these groups have guaranteed issue for active employees, making it easy to enroll (no, they are not finding "people signing up initially that are already sick"). Spouses and retirees under all these plans have short-form underwriting (six questions), again making it easy to enroll.

Premiums for these self-funded plans average 25% less than comparable individual insured policies, and the fully insured plans average 10%-15% less than comparable individual insured policies, partially addressing the "too expensive" issue. The "too confusing" and "too difficult to understand" can be addressed by keeping policy language simple, simple, simple.

These insured plans have 10-year rate guarantees for actives and five-year rate guarantees for retirees. All these plans combined have an average enrollment that exceeds 20%.

One problem in drafting simple language for policies is that it does not always pass all regulatory requirements in all states, but it does attempt to address the "too confusing and too difficult to understand" issues. In some states, required regulatory language for fully insured plans can only serve to complicate matters. A simple approach to policy language does not present any problem for self-funded plans because there are no regulatory requirements and no risk, because 100% stop-loss arrangements can be made.