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For decades, consumers and insurers alike have conceived of long-term care (LTC) insurance primarily as a hedge against the financial burden associated with getting help with activities of daily living (ADLs), such as eating, dressing and bathing. 

Within the past few years, however, a paradigm shift has taken root across the LTC insurance space. More and more insurers are taking a proactive approach to care management in the form of wellness plans: a variety of preventive care regimens designed to help keep people healthier, longer — which improves policyholders’ quality of life, reduces the number and duration of claims and, in turn, saves insurers money.

Rhett Wieland, vice president of long-term care claims strategy at Prudential Financial, is an industry leader who has become a passionate advocate for LTC wellness plans — not just for Prudential, but for the LTC industry as a whole. At the annual ILTCI conference in March 2024, Wieland joined Sasha Spellman (ATC) and industry leaders Daniel Kaplan (Equitage Ventures), Eric Levitan (Vivo) and Robin Devine (John Hancock) to discuss the importance of building and supporting an AgeTech ecosystem. Those attending the session were able to hear the individual viewpoints and goals from an early stage startup, an investor and an LTC insurance carrier.

When Wieland began this journey, he borrowed the concept of wellness plans from the property and casualty insurance industry — for example, auto insurance companies that aim to reduce the number of claims by rewarding policyholders for taking a safe-driving course. Wieland began exploring the efficacy of that approach for either flat-out reducing the number of claims or, at a minimum, delaying the need for a claim, which benefits everyone in the long-term care insurance ecosystem. 

 “There is a continuum to the benefits that wellness plans can bring,” says Wieland. “The ideal outcome would be that a person stays or gets healthy and never has to file a claim. Because if you have to file a claim, that means you’ve lost the ability to carry out at least two ADLs, and no one wants to be in that position.” But even being able to delay a claim through improved health has benefits. “If you have a $300,000 policy and you’re able to stay healthy longer,” says Wieland, “that can help ensure you remain financially viable for that much longer.”

But as Wieland began to advocate for this approach, his peers in the LTC industry met him with blank stares — literally. Wieland recalls the first time he and a colleague presented the idea at a conference in Nashville. “At that time, everyone in the room was thinking about claims management in terms of reducing fraud and paying the right claim at the right time. No one in the room was thinking about moving the entire claim management process way upstream. So when we presented our idea, you could have heard a pin drop.”

Moreover, Wieland discovered that consumers themselves can be hesitant to participate in a wellness plan, which can involve collecting medical data. “People tend to see their LTC carrier as a potential adversary, not as an entity that wants to help them stay healthy. They think, ‘If I need to make a claim, you’re going to use that information against me.’” (In fact, data gathered from wellness programs is isolated from the claims process.) “So there’s an engagement problem,” says Wieland. “But that will change when we’re able to leverage brands that individuals respect and trust, such as AARP.”

Dedicated to inspire consumer participation and to drive a paradigm shift across the industry, Wieland and Prudential joined the AgeTech Collaborative™ and started working with ATC startup participants, including Vivo, an online, live and interactive fitness program for older adults with a focus on increasing strength and function with proven outcomes. As part of their work together, the companies plan to launch a pilot program later in 2024. “We’re so excited to work with Prudential on bringing Vivo to their policyholders,” says Eric Levitan, founder and CEO at Vivo. “We know that when older adults are consistently engaged in exercise, they see positive health outcomes. Those outcomes will benefit everyone in the long-term care ecosystem, and Vivo can be a catalyst for making that happen. We’re grateful to Prudential for helping us demonstrate that in partnership with them.”

Prudential also began working with another ATC startup participant, De Oro Devices, which uses research-backed sensory cues to help people with mobility impairments improve mobility and reduce fall risk with their flagship product, NexStride. “We love working with De Oro Devices, because their technology helps people with advanced central nervous system disorders who have difficulty walking,” says Wieland. “If people can age in place and be mobile at home, they’ll be happier. In addition, central nervous system claims are Prudential’s second-largest category of claims, so when people remain in their homes, Prudential realizes savings, too.”

For its part, De Oro Devices concurs with the win-win nature of wellness programs. “We’re glad to be working with Prudential as the wellness program ecosystem grows, bringing the benefits of NexStride to more people and helping them increase independence, reduce fall risk and stay mobile, stay healthier and stay longer in their homes,” says Sidney Collin, co-founder and president of De Oro Devices.

According to Wieland, it’s still early days for all this. “One question we still have to answer is: Do these programs actually work? Can we get enough engagement with enough people with enough results over time to actually move the needle? There’s significant brand value and customer experience value to these programs, but over time, we’ll need to see some measure of financial return as well.”

Still, the future looks bright, and facilitating connections between insurers, startups and third parties to nurture a foundational ecosystem will promote continued growth. For example, companies working with a third-party vendor to set up and administer pilot programs can form a streamlined, synergistic relationship. “If a pilot is successful, then other companies using the same vendor can form a cohort of opportunity, and instead of the benefits going to 100,000 policyholders, they can go to millions,” says Wieland.

Wieland envisions that the category of AgeTech — and the AgeTech Collaborative™ in particular — will continue to play a critical role in advancing the movement’s reach. “With its great connections, industry contacts, and mature vetting process,” he says, “the Collaborative is a natural partner for the long-term care insurance industry.”

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