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Nod And Slap

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In the coming weeks, many insurance heads will be weighing in on the latest Government Accountability Office report on long term care insurance covering LTC claims and rates.

It is clear that Congressional leaders will be using the findings in the report to justify probes into some “troubling issues” about LTC insurance they say the report identifies. For instance, Rep. John Dingell, chairman of the House Energy and Commerce Committee, said, “If the insurance industry is not up to the task of correcting these problems swiftly and treating vulnerable policyholders and their families fairly, then Congress will need to consider steps to ensure strong, uniform national standards.”

For the industry, hearing such warnings can be more than a little vexing, especially since providers, distributors and regulators have spent the last several years strengthening LTC insurance standards and practices. Indeed, in recent years, most industry leaders have felt the business is now operating on the firmest footing ever.

The GAO report does acknowledge improvements. For instance, it gives a capsule summary of year 2000 revisions to the National Association of Insurance Commissioners’ model regulation on LTCI. As LTC professionals know, these revisions were implemented to improve LTC rate stability and related consumer concerns.

However, while recognizing those changes, the GAO report also dings their implementation, bringing their effectiveness into question. One example:

“Although a growing number of consumers will be protected by the more comprehensive standards going forward,” the report says, “as of 2006, many consumers had policies that were not protected by these standards.”

Hello? Is anybody home? Those comments reference experience as of 2006, not mid-2008. And they reflect GAO’s analysis of 2006 NAIC and unidentified industry information, pretty vague stuff. That means the statements need to be taken with more than the proverbial grain of salt.

That is the gist of the entire report. A nod here followed by a slap there.

It would be hard to conceive of a government report that does not take such an approach. To come out with heavy praise of the LTC insurance business (or any business) and little or no criticism would invite all kinds of accusations–of the report being biased, deceptive and untrustworthy. Government reports just don’t do that.

Still, since some legislators are already threatening action if the industry doesn’t “swiftly” address report-identified problems, the industry and its state regulators should not sit idly by until the dust settles.

Instead, they should 1) read and analyze the report; 2) apply critical thinking to the points, data and conclusions; 3) develop a list of inaccurate or incomplete statements, complete with supporting data and information; 4) develop a list of areas where the report is spot-on, again with supporting data and information; and 5) distribute reports of their own, complete with their own proposals concerning regulation.

This should be done in the spirit of engagement, not retaliation. It should be done with a desire to inform and educate, not to pillory and pummel. And it should be done with acknowledgement that some problems did and do exist, not a Pollyannaish portrayal of all things LTC. This is essential so that decision makers can come to accurate conclusions about whatever proposals they may be presented. The American public deserves nothing less.


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