The National Association of Health Underwriters (NAHU) wants to expand the market for long-term care insurance while helping save tax dollars as an aging population faces a greater need for care in the future.
NAHU is in the planning stage of presenting Congress with a proposal that would provide private-sector solutions that would enable more Americans to buy long-term care insurance, NAHU’s Vice President of Congressional Affairs John Greene told InsuranceNewsNet.
These solutions would include: allowing LTCi to be offered as a group benefit that employees would pay for using pretax dollars, permitting employees who are enrolled in 401(k) and 403(b) accounts to use those funds to pay for LTCi, and tightening the eligibility requirements to have Medicaid pay for long-term care.
“We are looking at how to fill the vacuum left by the failure of the CLASS Act,” Greene said. The Community Living Assistance Services and Supports Act (CLASS Act) was enacted as part of the Affordable Care Act. CLASS would have created a voluntary and public LTCi option for employees, but it was repealed in 2013 after the Obama administration declared it was unworkable.
Greene pointed out a number of advantages that NAHU’s proposal would provide to Americans who are in the workforce. Offering LTCi as a group benefit to employees would enable people to buy coverage at a better rate than they might be able to obtain it on their own, and the coverage would be portable, meaning that workers could keep the coverage even if they change jobs, provided that they continue to pay the premiums. “We want to get people into long-term care coverage before they leave the workplace,” Greene said.
By allowing workers to purchase LTCi with their 401(k) or 403(b) funds, employees would be protecting and preserving their retirement nest egg with pretax dollars, he added.
In addition, making changes to Medicaid requirements would help to preserve public funds, Greene said. “Much as you saw the Social Security disability system going broke after the last recession, now with long-term care, it’s going to be déjà vu all over again with Medicaid,” he said.
Greene said that he hopes to schedule a meeting with the Senate Special Committee on Aging to discuss the proposal. He said that NAHU may wait until the new Congress is seated before moving further on the plan.
The LTCi scene has experienced some upheaval in recent years, with many carriers abandoning the market and consumers who bought policies years ago finding themselves facing double-digit premium increases today.
“By expanding the LTCi market, you would get more people enrolled, the price would settle down and carriers would come back to the market,” Greene predicted.
“We either do something to save this industry or we’re all going to be paying a lot more in taxes to fund care.”
Expanding the market for LTCi is another way that NAHU members can diversify their practices, Greene noted. The ACA has slammed health insurance agents in the wallet as commissions on individual health policies have been slashed.
“The days of selling health insurance across the kitchen table are gone,” Greene said. “(NAHU) has always encouraged our members to diversify. Our members have been branching out into small group health, dental and vision, and Medicare Advantage. This is one more way they can provide a service to the public.”
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]
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