Revisions to an existing long term care model regulation continue to raise issues on external reviews and incontestability as was evidenced by a discussion among state insurance regulators attending the winter meeting of the National Association of Insurance Commissioners, Kansas City, Mo., here.
Robert Glowacki, vice president-government relations with Aegon, Bedford, Texas, said that external reviews result in companies having to pay for benefits that are not triggered by at least two activities of daily living, as was planned when the product was developed. Consequently, he said, if these reviews were imposed, insurers could face price stability issues.
Wisconsin Commissioner Jorge Gomez responded that external reviews in his state had not caused a big increase in claims paid out. The evaluation looks at the contract language, he explained.
External reviews can be important because not all companies will look at triggers in the same way, according to Bonnie Burns, an NAIC funded consumer and representative of California Health Advocates, Scotts Valley, Calif. Burns said that whether benefits are approved by a carrier also can depend on when during the day the carrier’s representative assesses the contract holder and whether a person, at that particular point during the day, cannot do all or enough to accomplish a task. External review is “an important right that people have on this type of insurance. Any review, either internal or external, is still based on contract requirements.”