Richmond's CareScout launches long-term care insurance policies CareScout, a Genworth unit, launches long-term care insurance policies

A Richmond firm that helps people connect with long-term care services, from home health aides to nursing homes, is launching into the business of helping people finance that care.

Genworth Financial' s CareScout unit will offer long-term care insurance policies - the first to plunge into this troubled market in years.

Older long-term care policies - the most recent versions licensed in Virginia date back about a decade ago - have seen double- and sometimes triple-digit percentage increases in premium charges, as the companies that offered them struggled to build up reserves to pay future claims after missing their initial forecasts on claims and on the numbers of policy holders letting their coverage lapse.

Lifetime benefits were large, inflation protection generous and insurers found that policies they thought might pay benefits for only one instance of long-term care found that consumers' growing interest in home care meant they were filing more frequent claims than expected.

CareScout said it has found a way to offer a long-term care policy that better matches what people these days want.

The company took a fresh look at the billions of dollars its parent Genworth has paid over the past three decades on its older long-term care policies. It found that for many policyholders, care at home was what they really wanted, rather than costlier stays in nursing homes.

At the same time, while older policies tended to offer unlimited benefits, only a small number of policyholders ever needed them - but enough did to throw Genworth's projections of claims costs out of whack, as happened with the other big insurers who plunged into the business decades ago.

So CareScout's new coverage - the insurance is from CareScout and is not a Genworth product - caps maximum benefits.

People can buy coverage for between $50,000 and $250,000, with daily benefit maximums from $50 to $200. They can buy inflation protection with options of 1%, 3% and 5%.

Another key to the CareScout coverage is its connection to a network of certified providers of various long-term care services. CareScout has negotiated prices with these that reflect its ability to suggest, not require, that people use network providers. The company said it is its certification of quality that will lead its policyholders, as well as people who just want to tap its expertise, to choose those providers.

CareScout has an agreement with a reinsurance company that will serve as a backstop.

"The launch of CareScout Care Assurance is more than the introduction of a product, it's the beginning of a new chapter for CareScout, as we provide curated experiences for our long-term care insurance policyholders based on their needs and preferences," said Lynn White, CEO of CareScout Insurance Company.

The CareScout policy would cover services at nursing homes, assisted living facilities, adult day care and home health care.

Earlier this year, sketching plans for the coverage, Genworth chief executive officer Tom McInerney told Wall Street analysts the coverage would be priced conservatively.

"We will be reviewing the pricing assumptions against reality over time and seeking increases if we need to, although this product is designed where we won't need an increase," he said at the time.

Dave Ress (804) 649-6948dress@timesdispatch.com