MetLife discontinues sale of new LTC insurance

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NEW YORK-Following a review of its long-term care insurance business, MetLife announced last month that it will discontinue the sale of new coverage.

MetLife will continue to accept new applications for individual long-term care insurance policies received on or before December 30, 2010. In 2011, the company will be discontinuing new enrollments into existing group and multi-life long-term care insurance plans. The timing will vary based on existing contractual obligations.

This decision will have no impact on existing customers’ coverage, according to a company release. As long as premiums are paid on time, coverage cannot be canceled. MetLife customers can continue to make coverage changes per the terms of their policy or certificate, including inflation protection offers and requests to increase or decrease coverage.

“While this is a difficult decision, the financial challenges facing the LTCI industry in the current environment are well known,” said Jodi Anatole, vice president, Long-Term Care Products, for MetLife.

Record-low interest rates have caused insurance companies to forecast lower profitability through next year or beyond, according to a report in The Wall Street Journal.

“Insurers lately have been investing the premiums they collect in bonds that, on average, are yielding 1 to 1.5 percentage point less than bonds in their existing portfolios, leading to less investment income,” The Wall Street Journal reported. “The increasing likelihood of sustained low rates and bond yields is one reason life insurers have redesigned and repriced some products, offering less-generous features to individuals. These include long-term care insurance and retirement-income products with minimum-income levels.”

MetLife said it may eventually look to combine long-term care insurance with other products, which the company believes can effectively address the long-term care financing needs of the public as well as its business goals.

Propsed CMS rule sets stage for Medicaid Recovery Audit Contractors

The Centers for Medicare & Medicaid Services (CMS) proposed a rule last month to help states reduce improper payments for Medicaid healthcare claims through the implementation of Medicaid Recovery Audit Contractors (RACs).

Medicaid RACs are contractors, working for states, who will audit payments made to healthcare providers to identify those that may have been underpaid or overpaid, and will recover overpayments or correct underpayments, similar to the RAC program in Medicare.

“We are using many of the lessons that we learned from the Medicare RAC program in the development and implementation of the Medicaid RACs, including a far-reaching education effort for healthcare providers and state managers,” said CMS Administrator Donald Berwick, MD, in a release.

Under healthcare reform, states must establish Medicaid RAC programs by submitting state plan amendments to CMS by December 31, 2010. The law allows CMS to provide extensions or exceptions to states, if necessary, and details regarding these processes are included in the proposed rule. The proposed rule also outlines the requirements that states must meet and the federal contribution CMS will provide to assist in funding the state RAC programs.

Medicaid RACs will be paid by the states on a contingency basis to review Medicaid provider claims. The proposed rule allows states the discretion to determine whether to pay their Medicaid RACs on a contingency basis or under some other fee structure for identifying underpayments.

Because CMS has proposed to require states to implement their programs in a timely manner, CMS is providing educational programs to help states understand both the Medicare and Medicaid RAC programs.

Long-Term Living 2010 December;59(12):10

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