COVID-19 and Long-Term Care Insurance Operations

COVID-19 has had a tragic and shocking effect on long-term care in the United States.

About 23% of U.S. COVID-19 deaths have involved people who lived or worked in LTC facilities.

Everything else pales in comparison with that grim statistic.

But the pandemic has affected the operations of long-term care insurance issuers and LTCI issuers' service providers.

The Intercompany Long-Term Care Insurance Conference held a panel discussion on those effects Monday in Raleigh, North Carolina.

Paula Johnson, a vice president at LTCG, was the moderator.

The speakers were Micki Lockard, director of long-term care claims and compliance at CNA Financial; Jeff Ferrand, vice president of fraud services at LTCG; and Sandy Jones, a partner at a law firm, Faegre Drinker. (I am working with Faegre Drinker on an LTC planning podcast series.)

The Facilities

Johnson pointed out that the pandemic has cost U.S. LTC facilities about 250,000 employees, increased spending on employee pay, and hurt facilities' ability to meet minimum staffing requirements.

Lockard said home health care agencies have struggled to compete with companies such as Target for good employees. The home health care agencies have been paying $12 to $14 an hour in much of the country; Target pays $18 an hour.

At LTC facilities, the labor shortage is so severe that the shortage is resulting in lower admissions.

The Insurers

Lockard said the pandemic-related shift to working at home helped LTCI issuers such as CNA in one way: CNA could hire employees away from its geographic location.

But that put the company in competition with other employers in other areas in the same industry.

Managers have had to learn how to supervise people remotely, and they have had challenges keeping people.

Insurance carriers are responding by working to make more use of automation.

Legal Considerations

Faegre Drinker helps LTCI issuers with legal matters.

Jones said one concern is the effect of the pandemic-related shift to working at home on insurers' access to medical records.

Insurers are denying some LTCI claims because of delays in getting doctors' records, Jones said. She said an issuer may re-open a claim if that seems appropriate.

Another concern is that insurers are relying heavily on video recordings, rather than face-to-face meetings, to assess insureds.

Still another concern is what to do about policies that cover only facility-based care when lockdowns push the insureds into using home health care.

The burden is on the insured to show why the insurer should pay for home care, but some insureds have managed to persuade issuers of facility-only policies to pay for home care, Jones said.

The Investigators

Ferrand helps LTCG investigate concerns about LTCI-related fraud, waste and abuse.

He said pandemic-related travel obstacles have interfered with investigators' ability to interview people, get evidence and put people suspected of wrongdoing under surveillance.

Investigators have managed to replace most of in-person interviews with virtual interviews, and that is cost-effective, he said.

But he said he believes there is still a need for in-person interviews.

Margie Barrie, an agent with ACSIA, has been writing the LTCI Insider column since 2000. She is blogging about long-term care planning with Chris Petillo, and preparing to launch an LTC podcast series, at Faegre Drinker's LTCi Summit website.