Federal Oversight of Long-Term Care Insurance Practices Under Consideration

Our friend Bonnie Burns testified before the House Energy and Commerce Oversight and Investigations subcommittee last week about the need for federal standards governing private long-term care insurance policies. Burns, a policy specialist at the Medicare advocacy organization California Health Advocates, pointed out the “disconnect between those services available in a community and the way they are described in an insurance policy, and no two companies have the same definitions.”

We agree with Bonnie that uniformity can help consumers more fully understand what they are purchasing and what they can expect when they need benefits. Limited federal intervention in this area may assist the industry to develop affordable products that would appeal to the public the same way life, automobile and home insurance does. Many states are doing an excellent job of educating their residents about the value of long-term care insurance.

What would really make a difference, however, would be if the insurance industry would begin to police itself before the federal government has to address long-term care the same way it did retirement benefits through ERISA, the Employees Retirement and Income Security Act, which has been a bureaucratic headache since its inception. The industry needs to take an honest survey of its claims-handling practices, ending the “delay-and-deny” tactics so many policyholders are subjected to.

While industry experts such as Marc Cohen, president of the long-term care consulting firm Life Plans, who also testified before the subcommittee, continue to insist that unresolved disagreements between long-term care policyholders and carriers remain less than 5 percent of all claims, the widespread dissatisfaction with claims-handling tends to belie that statistic.

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