はじめに

COVID-19パンデミックの発生と、そのウイルス蔓延防止に対する米国政府の取り組みは、米国のヘルスケアの状況にボラティリティをもたらしました。長期介護保険（LTCI）業界もその例外ではありません。

全米保険監督官協会（National Association of Insurance Commissioners、NAIC）の2020年末長期介護経験報告フォーム（Long-Term Care Experience Reporting Forms、ERFs）¹に企業が提出したデータの徹底的レビューに基づき、ミリマンでは、2019年と比較した顕著なポイントの考察をまとめました。

1. 保険発生率が2020年に14％減少
2. 既発生保険金のトレンドが長年にわたる増加の後2020年に0%
3. 保険金請求当たりの平均コストが2020年に18%上昇

その後のセクションでは、過去10年間の変化を含め、対象となる被保険者、保険金請求、給付金に関する単独のLTCIを扱う業界の全般的規模に着目します。特に、COVID-19パンデミックに関わる2020年のデータに関して考察します。昨年見られたボラティリティの多くは、COVID-19パンデミックに起因するとみられます。またNAICが2020年末のERFsフォーマットを改定したことを記しておきます。今回のレビューで観察された変化の一部は、従来と違う方法での会社の報告値の影響を受けている可能性があります。

本稿は、2019年ERFsの結果を示した過去の記事「LTC単独市場の規模は、想像よりも大きい」をフォローアップするものです。なお、以下に記載した全ての値は、2020年ERFデータを使用しており、単独のLTC業界を対象として分析しています。ミリマンでは、毎年のERFsから得た追加的考察も入れた広範な報告を目指しています。

Introduction

The onset of the COVID-19 pandemic, as well as the US government’s attempts to control the spread of the virus, has introduced volatility into the American healthcare landscape. The long-term care insurance (LTCI) industry is no exception to this phenomenon.

Based on a thorough review of company-submitted data from the year-end 2020 Long-Term Care Experience Reporting Forms¹ (ERFs) of the National Association of Insurance Commissioners (NAIC), we summarized a few notable observations relative to 2019:

1. Claim incidence rates decreased 14% in 2020
2. After many years of increases, incurred claims trend was 0% in 2020
3. Average cost per claim increased 18% in 2020

The sections that follow focus on the overall size of the standalone LTCI industry with respect to covered lives, claims, and benefits, including changes over the last decade. In particular, we describe our observations related to the COVID-19 pandemic on 2020 data. While much of the volatility observed in the last year may be attributed to the COVID-19 pandemic, it is also worth noting that the NAIC updated the format of the ERFs for year-end 2020 and some of the changes we observed in our review may be influenced by companies reporting numbers differently than in the past.

This article is intended to be a follow-up to a previous article, “How big is the standalone LTC market? Bigger than you might think,” which presented findings from the 2019 ERFs. Note, all figures included below use 2020 ERF data and our analysis focuses on standalone LTC insurance only. We intend to publish a broader report with additional observations from the ERFs on an annual basis.

Covered lives

Nearly 6.4 million individuals have standalone LTC insurance coverage through a private LTCI policy as of 2020. The number of covered lives has been declining in recent years. Policy terminations have outpaced new policy issues by almost 125,000 individuals per year over the last eight years, attributable to overall declining new sales during that period. When sorting companies from high to low by earned premium in 2020, nearly 60% of all private LTCI policyholders are covered by one of the top five largest companies (see Figure 1). The top five companies based on 2020 in-force premium (and consistent with 2019) are Genworth, John Hancock, Northwestern Mutual, MetLife, and Unum. Overall, it appears COVID-19 had minimal impact on the number of covered lives in 2020.

Figure 1: Private LTCI covered lives by calendar year and company size (thousands)

Claim counts

While the number of covered lives has decreased in recent years, a historic tally of open claims has a different pattern. A net increase of more than 10,000 open claims per year occurred from 2009 to 2019 as policyholders age and approach the time when care is most common. Over the last decade, this effect accumulated to more than a 50% increase in open private LTCI claims. However, in 2020 there was a sharp drop in the number of open claims (see Figure 2).

Figure 2: Count of open private LTCI claims by calendar year (thousands)

Because total policyholders covered gradually declined while open claim counts increased through 2019, claim prevalence (i.e., the percentage of total covered lives with an open claim) consistently increased until 2020—see Figure 3. Similarly, claim incidence (i.e., the percentage of total covered lives with a new claim each year) increased through 2019—see Figure 4. Again, these trends took a sharp dip in 2020.

When examining trends further by individual and group business, Figures 3 and 4 show prevalence and incidence are generally higher for individual business. Potential causes for this relationship include differences in insured characteristics, such as:

• Average attained age: Group business generally has lower average attained age than individual business, which could yield lower prevalence and incidence rates.
• Average policy year: Group business may have been issued more recently, on average, compared with individual business, which could also yield lower prevalence and incidence rates.

We also note the COVID-19 pandemic as a likely driver of the sharp dip in the number of open claims in 2020. In the SOA report conducted by Milliman, COVID-19 Impact on Long-Term Care Insurance, published in October 2021, companies mentioned they are seeing lower claim incidence (which directionally aligns with Figure 4 below).

Figure 3: Prevalence rate by line of business, open private LTCI claims as % of covered lives

Figure 4: Incidence rate by line of business, new private LTCI claims as % of covered lives

Benefit dollars

While the growth in open claim counts certainly points to the changing size of private LTCI as a payer for LTC services, the growth in annual benefits incurred over the last decade underlines this point. Figures 5 and 6 illustrate this growth—a 104% cumulative increase since 2010, reaching $12.9 billion in annual claims in 2019.

Claims incurred under individual LTC plans dominate the Figure 5 graph, representing 89% of all claim dollars in 2020. Individual LTC plans generally exhibit more claims due to a larger number of covered lives and older policyholders compared to group LTC plans. Figure 6 shows more than 47% of 2020 claims were from the five largest companies—a percentage that has been increasing over the last decade. It is worth noting, however, that these five largest companies are also responsible for nearly 60% of covered lives (as shown in Figure 1 above).

When focusing on 2020, we observe annual benefits remain flat in 2020 after years of steady increases. Given the sharp drop in new claim counts illustrated in Figure 4 and flat change in benefits illustrated in Figure 5, the next section explores how increases in average claim size offset the drop in claim counts.

Figure 5: Annual incurred private LTCI claims by line of business ($ millions)

Figure 6: Annual private LTCI claims by company size ($ millions)

Claim size

The change in annual incurred claims is not only attributable to the change in claimant counts but also to the growth in the average size of claims. As seen in Figure 7, the average claim size increased from roughly $95,000 in 2010 to $170,000 in 2020. The 5% to 6% annualized increase in average claim size likely has multiple causes, such as:

• Growing pool of money: Individuals who have a policy with inflation protection have access to a larger pool of benefits year over year.
• Increasing length of claim: Individuals may be remaining on claim and collecting benefits for a longer period than in past years.
• Rising cost of care: As the daily average cost of LTC services has increased, so has the average claim size.

In 2020, although the count of open claims dropped significantly, those on claim showed much higher average claim sizes in terms of dollars. This may be because, during the COVID-19 pandemic, a higher proportion of those individuals who would ordinarily pursue home health care deferred their need relative to those who require more expensive facility care. The net impact of claim counts dropping and average claim sizes increasing produced a flat trend of claim dollars into 2020, as shown in Figure 6.

Figure 7: Average private LTCI claim size by line of business

Conclusion

The demand for long-term care services across the country has grown steadily over the last decade as Americans continue to age. This trend can also be clearly seen in the growth of claims in the private LTCI market. While still a relatively small payer for long-term care services relative to the Medicaid program, the standalone private LTCI market is responsible for almost $13 billion in annual claims and growing and covers over 6 million individuals nationwide.

The COVID-19 pandemic certainly has produced some different patterns in the data for 2020 versus 2019 and prior. As the world continues to cope with the pandemic, it will be interesting to watch how these patterns change over time.

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¹ All data in this article comes from company-submitted 2020 year-end NAIC Long-Term Care Experience Reporting Form 1.