Consumer Rep Responds To Reader On LTC Issues
To The Editor:
The April 21 letter written in response to your March 24 article, “Market Changes Pushing Update of LTC Model Act,” demonstrates a less than firm grasp of the issues. The Long Term Care Insurance Working Group of the NAIC Senior Issues Task Force was established to address the concerns of a number of people and the need to update the model.
One of my concerns was in regard to definitional differences in benefits for assisted living from one state to another. This has nothing to do with “core benefits” offered by companies in most states. But it has everything to do with whether a consumer can use those benefits when they are purchased in one state and used in another. Assisted living in particular is organized, licensed and delivered differently in many states. A benefit for assisted living contained in a policy issued in one state may not meet the definitions for assisted living in a different state.
Agent training and licensing is an issue that has been raised over many years by AARP, other consumer representatives and me. I am certain the letter writer has been exposed to both high quality and subpar training courses over the years. Having reviewed some of those courses in the past for our insurance department, I certainly have seen a wide spectrum of such courses. I dont think its unreasonable to ask the working group to consider whether to establish some standards for these courses to help guide states that have less experience with this product than the states represented on the Senior Issues Task Force.
The fact that no training is required for the sale of annuities does not bolster the argument that none is needed for LTC insurance but exposes yet another danger for consumers.
I disagree that agents who are not high caliber quickly fade away, and I think some state insurance departments will agree with me. LTCI is definitely not a quick sale for responsible agents, but it can be an easier sale for some who are poorly trained and dont understand the complexities of the issue or the product they are selling.
And, of course, mandated training will not rid the market of bad actors, but better training might help some agents do a better job who havent yet reached the level of certifications held by the letter writer.
In regard to the issue of a 12-month benchmark, the letter writer clearly misses the mark. The NAIC model applies to products with a duration of 12 months or more. Any product paying benefits for long term care services for durations less than 12 months escapes the requirements of the model. At least one company sells such a product for six or nine months durations. This issue has nothing to do with durations appropriate for an individual consumer and is an entirely different topic.
And, in fact it would be sad if companies dropped policies of shorter durations as he states some already have, since some older, moderate income people can cover at least a portion of their risk with a one- or two-year policy.
The issue of guaranteed insurability was a discussion about future innovation for younger people unwilling to buy a current package of benefits without knowing where and how LTC services would be delivered in the future. This is a concept some have discussed as a way to guarantee a person the right to buy coverage in the future. Again this has nothing to do with the issue raised by the letter writer in regard to guaranteed renewability of current products and future purchase options for inflation protection.
Its too bad the writer decided to attack me rather than have a reasoned discussion based on facts about how our views and opinions might differ. If the letter writer is really concerned that the NAIC is not getting worthwhile representation of consumer interests and not getting its “moneys worth” I invite him to speak directly with anyone on the task force, the working group or with any of the commissioners.
California Health Advocates
Scotts Valley, Calif.
Reproduced from National Underwriter Edition, May 12, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.