An insurance group is opposing new legislation under consideration by the
The bill, HB 2333, was proposed by the
Long-term care insurance is typically purchased by the elderly and disabled, as well as those suffering from chronic physical illnesses. The department estimates there are 10 million people who need long-term care nationwide, as many as 6 million of those being 65 or older. The department argues that despite such policies being sold at “level” premiums that would not increase based on age or health situation, policyholders in
“State regulators have no discretion to limit premium increases if the rate filing meets standards, so we set out to change the law to further protect consumers,” said DOI Director
The bill would take effect immediately upon being signed into law.
Some insurance industry officials were upset by the cap proposal being applied to both existing and future long-term care premiums. “It’s ridiculous,” said
Regulations on new policies approved by the
Long-term care insurance rates typically do not increase annually, but after a policy has been in force for years, Slome said. The bill as written could result in rate increases for those not normally subject to them as insurers try to comply with the annual cap, he said. The bill does not give insurers an option of enabling consumers to pay the same rate in the short-run in exchange for future increases, Slome said.
Slome said he understands states' responsibility to protect consumers. "No politician has ever lost an election by attacking an insurance company," he said. "It's easy to look and say 'Look at how we're protecting the consumers.' But at the end of the day, free businesses are not obligated to provide products that are significantly unprofitable. [Passing this bill] would have repercussions, and ultimately the long-term burden would be placed on taxpayers."
Attempts to reach officials at the
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|Source:||A.M. Best Company, Inc.|