N O T E W O R T H Y
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A collection of recently published surveys, polls and
reports with information you may find useful
Consumers Purchasing More Affordable Long-
Term Care Insurance
Approximately 400,000 individuals purchased long-term care insurance protection in 2008, according to a report recently released by the American Association of
Long-Term Care. The overwhelming majority (84%) of individual buyers in 2008 were younger than age 65 and 76%
selected a more affordable approach to this protection by
opting for coverage for a specific number of years.
The annual study analyzed data on 215,000 buyers of
individual LTCI protection. According to the organization's research, some 8. 2 million Americans now have
LTCI protection purchased on an individual basis (
typically through an insurance professional) or through a plan
offered by their employer.
The number of individuals purchasing LTCI protection
for a specified number of years also increased, according to
the Association study. Seventy-six percent of buyers in
2008 opted for coverage for a claim lasting five years or
less, a slight increase over the prior year (71%).
The complete findings of the study are published in the
2009 LTCI Sourcebook available from the American
Association for Long-Term Care
Insurance. For additional information,
visit www.aaltci.org.
The subsidy, estimated to cost the federal government
nearly $25 billion per year, could help up to 7 million jobless individuals and their families maintain health care
coverage, according to an estimate by the Joint Committee
on Taxation.
With the subsidy resulting in beneficiaries paying about
one-third of the COBRA premium that often has a monthly cost of about $400 for individual coverage and $1,200
for family coverage, employers with lots of laid-off employees should expect a surge in enrollees.
Employers often lose a substantial amount of money
through COBRA as it is. Due to the high cost of coverage,
those now opting for COBRA typically make extensive use
or expect to use medical services. As a result, it is not uncommon for employers to pay out $1.50 in claims for every
$1 in COBRA premiums they collect.
With the government picking up nearly two-thirds of the
COBRA premium tab, the COBRA risk pool is certain to
improve, though premiums collected by employers still are
not likely to equal claims, experts say. A modest improvement in the premium-to-claims ratio is certain to be offset
by the flood of new beneficiaries opting for coverage.
Stimulus Bill to Increase
COBRA Usage
Employers will have to scramble to
comply with federal legislation providing
a federal subsidy of COBRA health insurance premiums to laid-off employees.
Employees who were laid off from
September 1, 2008, through December
31, 2009, will be eligible for a 65% federal subsidy of their COBRA premiums
under provisions in the massive economic stimulus bill.
On February 13, the House gave final
approval to the legislation, H.R. 1, and
the Senate passed the bill shortly thereafter. Beneficiaries would be entitled to
the subsidy for up to nine months or
until becoming eligible for coverage in
another employer's plan or for
Medicare. The subsidy, though, will not
be available to individuals with annual
incomes exceeding $125,000 or couples
with annual incomes exceeding
$250,000.
