Academy/SOA Long-Term Care Valuation Work Group Update to the NAIC LTC Actuarial Working Group Bob Yee, Chairperson Academy/SOA Long-Term Care Valuation Work Group April 5, 2013 Copyright Š 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April, 2013
American Academy of Actuaries The American Academy of Actuaries is a 17,000-member professional association whose mission is to serve the public and the U.S. actuarial profession. The Academy assists public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States.
Copyright Š 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April 2013
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Progress •
Received Excel workbooks with policy and claim records of 13 companies from Medical Information Bureau • Enabled calculation of incidence and claim
termination rates by company •
Reviewed summary data for each company
•
Assessed data quality and limitation
Copyright © 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April 2013
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Data Summary Study Period Number of Companies Number of Exposures Number of Policies Number of Claims
1984 - 2007 13* 29,000,000 5,450,000 217,000
* Out of the original 18 companies that contributed in the 2007 study. Copyright Š 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April 2013
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Data Summary (cont.) Findings of 200 Random Claim Records from Each Company % % % % % % % % Inforce % % % out of % Most without % Earliest Latest Recent without without force but without without but no without without without without without Daily without Coverage EP Benefit BIO Term Prem Martial Benefit Issue Issue Study Gender Issue no Term Type EP $ Benefit Type Type Pay Status Date Code Cause Date Year Code Company Year Year C D E F G H I J K M O S T U V Z zd zf
1980 1984 1985 1991 1997 1988 1985 1988 1987 1990 1989 1988 1988 1986 1986 1990 1988 1983
2001 2004 2002 2003 2005 2007 2003 2005 1994 2005 2003 2002 2000 2005 1991 2004 2003 2004
2001 2007 2004 2003 2007 2007 2007 2007 1995 2005 2004 2007 2007 2007 1991 2007 2007 2007
0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
13% 6% 2% 0% 0% 0% 5% 3% 0% 6% 1% 0% 0% 25% 0% 5% 0% 0%
0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 5% 0% 0%
13% 6% 2% 0% 0% 0% 100% 3% 0% 6% 1% 18% 8% 100% 0% 100% 0% 0%
13% 6% 5% 0% 0% 0% 5% 3% 1% 6% 1% 0% 0% 25% 0% 5% 0% 0%
40% 0% 2% 1% 0% 0% 1% 73% 68% 12% 70% 27% 20% 30% 58% 50% 0% 0%
13% 6% 2% 0% 0% 0% 5% 99% 0% 13% 1% 18% 8% 34% 0% 5% 0% 0%
19% 6% 2% 0% 2% 0% 7% 3% 0% 6% 1% 0% 0% 67% 0% 65% 0% 0%
37% 6% 2% 0% 1% 0% 5% 3% 0% 6% 89% 1% 0% 67% 0% 65% 0% 0%
40% 40% 10% 33% 42% 14% 16% 3% 36% 18% 1% 13% 5% 67% 2% 77% 47% 13%
37% 6% 2% 4% 1% 0% 5% 3% 0% 6% 89% 13% 3% 67% 100% 65% 0% 0%
37% 6% 2% 0% 1% 0% 5% 3% 0% 6% 0% 1% 0% 67% 0% 65% 0% 0%
13% 6% 2% 0% 0% 0% 5% 3% 0% 6% 1% 0% 0% 25% 0% 5% 0% 0%
% Recomwithout mended to be Zip Code Excluded * 8
75% 6% 2% 6% 0% 100% 100% 3% 0% 100% 100% 17% 9% 99% 100% 99% 0% 100%
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8 8 8
* The 5 excluded companies contributed 25 percent of total claim records. Copyright Š 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April 2013
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Data Summary (cont.) Distribution of Claims Company * D E F G H I J M O S T zd zf
Total
Compre‐ hensive
NH Only
20,151 35
81 16,716 685
7,319 6,765
2,985 2,462
1,451 3 1,200 520
59
1,352
16,354 6,740 4,055
771
Total 216,974 48,106 # Selected Claims 148,985 48,071 69% % Selected
HHC Only
Unknown 52,202 85
1,645 1,016 139
8,017 3,644 1,006 27,642
21,121
10,753
63,297 63,157
37,757 37,757
67,814
Copyright © 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April 2013
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Data Summary (cont.) Average Length of Stay Nursing Home Only
Comprehensive Company *
Nursing Home
ALF
Home Care
Others
1 2 3 4 5 6 7 8 9 10 11 12 13
858
Composite
665 855 782 313
Nursing Home
ALF
Home Care
Home Health Care Only Others
847 913 821 382
536 536 358 493
467 494 444 219 693 1,272 911 136 313
405 215 658 1,615 431 561 474 893 470
529 678 523 391 822 860 579 ‐
387
Nursing Home
ALF
Home Care
Others
464 722 975 236
1,280 597 583 681 551 473 581
428 653 324 594 352 427 692 603 421 352 638
974
1,312
1,114 278
531 740 412 182 353 439 339 273 779 911 675 217
934 485 633 385 432
748 826 469 186
* Company identifiers are different from that on the prior pages. Copyright © 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April 2013
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Assessment • Current data is inadequate to produce an
industry-wide table • Insufficient number of companies represented • Data quality varies significantly among contributing
companies • Significant amount of data has unidentified coverage
Copyright © 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April 2013
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Recommendation • Not to pursue a valuation table based on current
data • Wait for the next intercompany data update
provided by the SOA LTC Experience Committee • Additional information will be available (e.g., data
on inflation protection options) • Encourage more companies to participate Copyright © 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April 2013
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Next Steps • Although the entire data set is not sufficient for
an industry-wide table, there is some selected data that may be useful for comparative studies • Decision by the SOA LTC Experience Committee • Develop a tool for users (Excel pivot tables)
• Document the committee’s work, the data
quality criteria, and data specifications
Copyright © 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April 2013
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Academy Staff Contact Information Tim Mahony Health Policy Analyst (State) mahony@actuary.org 202-785-7880 1850 M St., NW, Suite 300 Washington, DC 20036
Copyright Š 2013 by the American Academy of Actuaries All Rights Reserved. NAIC Spring Meeting April 2013
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