Group LTCI and Federal Legislation

1. Group LTCI and Federal Legislation Session 36: Tuesday, February 28, 2006 Session Producer: Jeremy Pincus, Principal The Forbes Consulting Group, Inc.

2. PANEL • Robert Blancato, President, Matz, Blancato & Associates • John Greene, Director of Federal Affairs, National Association of Health Underwriters • David Martin, Corporate Secretary and General Director, LTC Contracts & Legislative Services, John Hancock • Roy Gosselin, CLU, Assistant Vice President, Long Term Care Division, MetLife

3. AGENDA • Overview of Legislative Activity (Blancato) • Long Term Care Insurance • Medicaid Reform • Recommendations from WHCOA

4. AGENDA • Expectations for Group LTCI Industry (Greene) • Near Term • Long Term

5. AGENDA • Preparing for changes to group and multi-life LTCI products (Martin & Gosselin) • Partnership Expansion • Section 125 • Others

6. Additional Insight The following slides submitted by John Cutler

7. Unfortunately, John Cutler is not able to participate at the ILTCI in person. John, however, has provided significant insight throughout the preparation for this session and has given permission to share his insight into the mood in Washington and its effect on GLTCI.

8. Health-based federal legislative proposals are distinguished from retirement security issues which is the other way the Congress and Administration often look at LTCi

9. LTC Partnerships – YES, we finally have language that reverses the “Waxman” amendment and allows the Partnerships to expand into all the states

10. LTC Partnerships – the provisions of law are in S. 1932 but will still need the development of regulations by CMS (in consultation with NAIC) • Technical corrections possibility via Congress, as well

11. Administration views including potential CMS regulatory solution to uniformity/portability will be important, especially if it can be done via the Medicaid waiver authority and not through the state insurance departments

12. FLTCIP experience relevant here in that we negotiated with the four states to no avail. We both wanted “uniformity” but we wanted uniform products across the states and they wanted it inside of their state by all of the different carriers

13. Other parts of Reconciliation Bill of interest – Impact of estate planning, asset protection, look-back period changes the environment in which you are selling insurance

14. Other parts of Reconciliation Bill of interest – National Long Term Care Information Clearinghouse would be set up by HHS (likely CMS and AoA in concert)

15. Other players that will impact the future of Medicaid should be on your radar screen – principally the Administration’s Medicaid Commission and the National Governors Association • And don’t forget Medicare-related ideas

16. Other health-related notions like HSAs also will have some impact on how long term care insurance is delivered

17. And Section 125 could well pass one of these days – cheaper than the above-the-line deduction and more in tune with the way Congress looks at group benefits

18. Possible next step by Congress -- National regulatory standards or maybe even a new federal regulatory agency as has been done in interstate banking (and favored by ACLI)

19. What Will the Future of Group Long-Term Care Look Like? • Employers will be mad that employees were sold non-compound products and do not have sufficient coverage when they get to time of claim (and come to the employer for redress) – this will be the next big fight with the regulators