When it comes to long-term care insurance applicants, family medical history is becoming a bigger part of the equation.

Genworth, for example, first started asking applicants about parental history five years ago. But now the insurer says it is rating long-term-care insurance applicants based on the medical histories of their parents. Just last month, the insurer issued a field bulletin to brokers and agents noting that the firm would consider whether an applicant’s parent had early onset coronary artery disease prior to age 60 or dementia prior to age 70.

“Currently, diagnostic genetic information that is found in obtained medical records, which has a relationship to an applicant’s risk, may be used in underwriting,” said Ray Dinstel, chief underwriter with Genworth. “Such histories will impact an applicant’s ability to receive the best rate categories.”

Genworth has four rating categories, from most to least favorable. They are preferred best, preferred, select and standard.

"For an applicant with both parents diagnosed with dementia prior to age 70, the best health class allowed would be select,” said Arthur Rudnick, a White Plains, N.Y.-based long-term care insurance agent. “For one parent who had a history of dementia prior to age 70, an applicant will not be eligible for the preferred best health class.”

That’s because applicants might inherit certain medical conditions from their parents. “Having a parent with early onset coronary artery disease increases one’s risk for coronary artery disease and other forms of cardiovascular disease,” Dinstel said.

A typical policy with no inflation growth for a male aged 55 years old and no parental history of early onset dementia or coronary heart disease would qualify for Genworth’s Preferred Best and pay $1,125 a year compared to $1,185 for an applicant of the same age and gender that has a family history of either medical condition, according to the American Association for Long-Term Care Insurance (AALTCI).

“Sixty dollars is not that big of a difference, but it’s clear that there’s now medical evidence and studies proving that if your parent suffered a condition, there’s a likelihood that you will suffer from it, too,” said Jesse Slome, AALTCI’s executive director.

In the case of Huntington’s Disease, a ratings category may not be available at all. “There are one or two companies that will outright reject you if there’s a sibling or parent in your family who had or has Huntington’s Disease,” Slome said. Genworth is one of them, where allowed by applicable laws and regulations.

“Genworth will decline an applicant whose parent has or had Huntington’s Disease if that applicant has not been tested or has tested positive,” Dinstel said.

Huntington’s Disease is a progressive, degenerative neurologic disorder that results in abnormal movements, cognitive impairment and the progressive loss of functionality.

“If an applicant has or had a parent with Huntington’s Disease, the risk of that individual developing the disease is 50 percent,” Dinstel said. “The product is not priced for any specific individual to have a 50 percent chance of requiring covered services. The risk exceeds the product pricing and cannot be assumed.”

Long-term-care insurance is typically regulated on a state-by-state basis, and policies are underwritten on a case by case basis. 

“This can seem cruel, but in the insurance marketplace it has the effect of keeping the cost of policies for healthier people lower than it would be otherwise,” said Martin Bienstock, an attorney with Weisbrod Matteis & Copley.

While the Affordable Care Act prohibits life insurers from using pre-existing conditions as a basis for setting rates, the rule does not apply to long-term care insurance and there are no privacy laws that prevent insurers from inquiring.

“The use of parental history is fairly common in the life insurance context and I'm not aware of any state that bars insurers from underwriting long-term care based on family history,” Bienstock said.  

MedAmerica is a long-term-care insurer that doesn’t yet take into consideration family history.

“We do not inquire as to the applicant's parent or grandparent's medical history nor do we inquire about genetics,” said Tricia Burnett, MedAmerica’s director of marketing and communications.

But Rudnick, the long-term care insurance agent, believes it’s only a matter of time before other insurers follow in Genworth’s footsteps.

Questions asked include the age of parents, whether they are alive and when they died, as well as whether either was diagnosed with any kind of cognitive impairment, coronary disease or diabetes.

“Parental history raises a flag for the insurer to review your medical records,” Rudnick said. “At 50 years old and below, Genworth doesn’t go for medical records but if on the application it says ‘yes my parents have Alzheimer’s,’ then Genworth has a reason to request your medical records.”

Requesting and reviewing medical records extends the time it takes for approval.

“Insurers are absolutely scrutinizing health conditions more because they are paying a lot of money in claims,” Slome said. “Their biggest risk is costly long-term claims so they are looking for occurrences that would spike claims.”