NCOIL Delves Into Alleged Abuses In The Long-Term Care Insurance Market

Jul 27, 2007

Below is information regarding a recent National Conference of Insurance Legislators (“NCOIL”) Summer Meeting in Seattle, Washington, where legislators commenced an investigation of alleged abuses in the long-term care insurance industry, and questioned whether current regulation adequately protects consumers of the product.

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NCOIL Delves Into Alleged Abuses In The Long-Term Care Insurance Market

Seattle, Washington, July 27, 2007 — Spurred on by a March 26 New York Times article regarding alleged abuses in the long-term care insurance market, the National Conference of Insurance Legislators (“NCOIL”) Health, Long-Term Care & Health Retirement Issues Committee here began its investigation into whether current long-term care insurance regulation adequately protects consumers.

Committee Chair Representative Susan Westrom (KY) said, “Our panel discussion provided a glimpse into alleged abuses in the long-term care insurance market, and solutions to further protect consumers. We will continue to examine this vital issue to ensure that our constituents are protected from abusive practices.”

Panelists included Guenther Ruch of the Wisconsin Department of Insurance, Donald Walters of the Insurance Marketplace Standards Association (“IMSA”), John Gerni of the American Council of Life Insurers (“ACLI”), and Martin Mitchell of America’s Health Insurance Plans (“AHIP”).  Consumer advocate Bonnie Burns of the California Health Advocates (“CHA”) submitted testimony for Committee consideration.

Ms. Burns, in her testimony, cautioned that states could do more to protect consumers, particularly in regards to Long-Term Care Partnership Programs that permit an individual to protect assets when applying for Medicaid equal to the amount of benefits paid by an insurer. 

She said, “State Medicaid programs should draft verbatim disclosure documents that describe asset protection, estate recovery rules, the state’s Medicaid eligibility rules, and the implications of moving to another state and require companies and agents to use them as a condition of selling and issuing a qualified Partnership policy.”

Mr. Ruch, who attended as a representative of the National Association of Insurance Commissioners (“NAIC”), provided a background of the long-term care insurance industry, and updated members on protections included in an NAIC Long-Term Care Insurance Model Act that seek to prevent abuses.

 

To read a previous NCOIL press release on this topic, click here.