CSG Actuarial keeps an eye on the latest news in the insurance industry. In this week’s blog post, we have an update on Aetna leaving most of the Obamacare Exchanges, a study from Kaiser Family Foundation on how Medicare per capita spending compares for younger and older beneficiaries, and details on the rising cost of long-term care insurance.
Aetna to Exit Most Exchanges | CNN, August 16, 2016
The insurer will stop offering policies on the exchanges in 11 of the 15 states where it currently operates, according to a press release it issued Monday evening. Aetna ( will only sell Obamacare products in Delaware, Iowa, Nebraska and Virginia. )
Aetna said earlier this month that it was halting its exchange expansion plans for 2017 and reviewing its participation in President Obama’s signature health reform program. The company noted Monday that it has lost $430 million in its individual policies unit since the exchanges opened in January 2014.
Similar but Not the Same: How Medicare Per Capita Spending Compares for Younger and Older Beneficiaries | Kaiser Family Foundation, August 16, 2016
Medicare is most commonly known as a health insurance program for people ages 65 and older, but, since 1973, the program has also provided coverage to millions of people with permanent disabilities who are younger than age 65.1 People under age 65 qualify for Medicare after they receive Social Security Disability Insurance (SSDI) payments for 24 months. Younger adults with end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS) are eligible for Medicare as soon as they begin receiving SSDI benefits. Over time, the share of Medicare beneficiaries under age 65 has more than doubled, from 7% (1.7 million people) in 19732 to 16% (9.1 million) this year.3
Medicare beneficiaries under age 65 with disabilities differ from beneficiaries age 65 and older in several ways.4In 2012, nearly two-thirds of all younger Medicare beneficiaries (65%) had a cognitive or mental impairment, compared to 29% of seniors. Nearly 6 in 10 (59%) reported their health status as fair or poor and almost the same share (58%) reported having one or more limitations in their activities of daily living, compared to 20% and 34% of seniors, respectively. In 2014, half of all Medicare beneficiaries under age 65 lived on income less than $17,050, one third less than median income of $26,150 among beneficiaries age 65 and older.5
Less is more: The dilemma over long term care insurance | CNBC, August 24, 2016
Eileen Cheng, 70, is holding on to the long term care insurance policy she purchased 15 years ago, even with an expected rate increase.“If you’re buying it at 60, you may need it when you’re almost 80,” she said. “You don’t know what will happen in the future.”
Cheng isn’t alone. More than 7 million policies are in force today, though the industry is a far cry from its heyday in the 1990s. Back then, more than 100 insurers were in the business, which seeks to protect aging clients — and their assets — from a costly stay in a nursing or assisted living home.
Today, the number of companies offering coverage is down to about a dozen. Low interest rates, lower-than-expected numbers of clients who drop their policies, and higher-than-predicted claims are to blame, said Scott Witt, a fee-only insurance financial advisor and founder of Witt Actuarial Services in New Berlin, Wisconsin.
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