By Paul E. Forte Chief Executive Officer Long Term Care Partners, LLC

1. The First Decade Long Term Care Discussion Group Washington, D.C. April 26, 2012 2002 2003 2004 2005 2006 2007 2008 By Paul E. Forte Chief Executive Officer Long Term Care Partners, LLC 2009 2010 2011 2012

2. TOPICS • Background/Structure • OPM Contracts • The Claims Process • Enrollment Growth • Current Scene/Future Directions

3. Origins • Early LTCI policies: Medicare model/prior hospitalization • Second generation individual policies • Employer Group plans for associations, state • governments, universities, labor unions, other • Proctor & Gamble, IBM, GE, AT&T, and Fortune 500 market • CalPERS LTCI Program • Small group and work-site policies

4. Long Term Care Security Act of 2000 (PL 106-265)

5. Federal Long Term Care Insurance Program (FLTCIP) • Created by Long Term Care Security Act of 2000 (PL 106-265) • Oversight by Congress • Sponsored and Regulated by U.S. Office of Personnel Management (OPM) • Master Contracts for seven years • Fully Insured

7. Federal Long Term Care Insurance Program (FLTCIP) • Enrollees subject to medical underwriting standards • Uniform across all states • Premiums 100% voluntary • Care Coordination • International Benefits • Assets held in separate • account

8. FLTCIP 1st Contract • OPM awarded first 7-year FLTCIP contract to John Hancock and MetLife in December 2001 • Initial Early Enrollment Period in March 2002. Main enrollment period (July 2002 through January 2003) • Largest national marketing campaign on LTCI to date • 197,000 enrollees after 1st Open Season • 225,000 enrollees by contract end • (Sept. 2009)

9. FLTCIP 2nd Contract • OPM awarded second 7-year FLTCIP contract to John Hancock in May 2009 • Adoption of new 2.0 plan; increase for ACIO enrollees in 1.0 plan • Special Decision Period: August 2009 through April 2010 • 2nd Open Season: April 4, 2011 through June 24, 2011

10. FLTCIP Special Decision Period, 2009 - 2010 • 146,400 affected with 5%-25% increase depending upon enrollee’s age at purchase • Personalized options with landing spots • Support via website and specially-trained customer service representatives • Special rate quote unit for other options • 45% choose options to avoid increase; 43% choose to stay in 1.0 and pay increase

11. Open Season: April 4, 2011 – • June 24, 2011 • First abbreviated underwriting • opportunity for non-enrolled • applicants since 2002 • More than 45,000 new people enrolled (20% increase) • 70% of enrollments electronic FLTCIP Open Season, April - June 2011

12. FLTCIP2.0:NewBenefitsandFeatures • Higher daily benefit amounts • ($100 - $450) • 2-year benefit period • 4% Automatic Compound Inflation • Option • No catastrophic coverage limitation • Enhanced home health care benefits –100%homehealthcare –Calendardays –Stay-at-homebenefit –500InformalCareDays

13. FLTCIP: Home Health Care • Reimbursed at 100% of Daily Benefit from $100 to $450 per day • Formal care by Home Health Agencies • Adult day care • Respite Care • Informal care by friends, neighbors, • and family members • Stay-at-home benefits • Care planning visits • Home safety check • Emergency medical response systems • Durable medical equipment • Caregiver training • *Does not reduce maximum lifetime benefit

14. FLTCIP Care Coordination • Registered nurses, with clinical experience, act as single point of contact • Available for enrollees, and their qualified relatives, even if not enrolled • Assessment, planning, service coordination, and counseling • Dedicated resources assigned to each case • Thoughtful utilization of benefits • Claimants’ Satisfaction Level: • 98% (+) since Program’s start

15. AIA Presentation ClaimsActivity • 150 new claims and 50 information/referral calls a month • 2,600 claims active • 9,100+ claims opened (program-to-date) • 7,100 in benefit (program-to-date) • Program currently paying over • $6 million each month in claims • Only cases of rescission have actually gone to court; no cases pending PointofServiceYTD AIA Presentation

16. Independent Third Party Review • Benchmark for consumer protection • In cases of disputed eligibilities or claims, after denial of appeal, file • may be submitted to independent • third party for evaluation • Third Party decision is binding • Five Independent Third-Party • Reviews, none of which have gone • to court

17. AIA Presentation FLTCIP Technology and ServiceEnhancements • Online Consulting Tool • Full application online • New secure personalized enrollee account and ability to make plan changes • Enhanced security measures for protection of personally identifiable and personal health information • Advanced fail-over plan to ensure continuity of administration

18. Enrollment Growth 18

19. Electronic Acquisition Model Solicitation Email Education & Decision Making - Web LTC & LTC Insurance Basics Full Underwriting Eligibility FLTCIP Product Features Email blast Direct clicks to Application Web Approximately 70% submitted online 80% in Open Season Online Consultant Tool Abbreviated Underwriting Cost of Care in your Area Rate Quote Calculator 19

20. Long Term Care: Current Scene • Total paid costs for LTC exceeded $250 billion in 2009 • Call for review of major entitlements in view of budget • deficits, long-term debt • Longer life expectancy • 78 million baby boomers entering retirement • Millions of boomers under-saved, unprepared for retirement

21. Long Term Care: Future Directions • Investment environment likely to remain challenging, • volatile • Self-insurance through savings, annuities, reverse mortgages • Private LTCI most reliable form of protection • More public-private partnerships likely • Efforts to curb Medicaid costs • Renewed attention to Medicare • FLTCIP, other large-scale employer-based programs, • preferred LTCI delivery models