“General Electric Has a Long-Term Care Problem. It Isn’t Alone”

“General Electric Has a Long-Term Care Problem. It Isn’t Alone,” by Leslie Scism, Wall Street Journal

“A GE executive on the company’s conference call Friday morning said the firm has actuaries combing through its long-term-care insurance reserves in ‘a very complex exercise’ to figure out if they are deficient. . . . GE still has billions of dollars in reinsurance obligations on its books from coverage it sold to other insurers that had sold policies to consumers. By doing so, GE took on some of those carriers’ responsibilities for paying claims, according to analysts. The risk for GE and others is whether carriers that sold long-term care policies have adequate reserves to pay future claims. . . . GE assumed the liabilities it now is analyzing through a series of reinsurance agreements, [securities firm] Evercore said. GE quit selling reinsurance policies some years ago. GE said Friday that its long-term-care reserves total about $12 billion, about half of its total insurance reserves. . . . Genworth has said it priced many older policies on the assumption the company would earn 7.5% a year on invested premiums. But new premiums are being invested today at about 4.25%.”

LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform):

No mention in this article of the bigger problem LTCI faced and faces: crowd out from Medicaid LTC benefits co-opted by middle income and affluent people for whom the welfare program was never intended.

General Electric Has a Long-Term Care Problem. It Isn’t Alone,”

#long-term care