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April 15, 2007 at 04:00 PM
Sen. Barack Obama, a candidate for the 2008 Democratic presidential nomination, is calling for a wide-ranging investigation of the long term care insurance industry.
Obama, D-Ill., a member of the Senate Health, Education, Labor and Pensions Committee, has written to the U.S. Government Accountability Office to ask it to look into a New York Times reporter’s allegations of widespread LTC insurance claims problems.
Obama also has asked the GAO to look into other concerns about the private LTC insurance market.
The GAO should discuss “what, if any, additional federal regulation is needed,” Obama writes in the letter to the GAO, which he released to the public through the Business Wire news release distribution service.
Although carriers may be mishandling claims, other concerns could include efforts to lure consumers with unrealistically low, lapse-supported premiums and policies that do not include effective inflation adjustment mechanisms, Obama writes.
The senator asked the GAO to report on claims denial rates, the extent to which denials were justifiable, and the percentage of policies sold that do adjust and do not adjust for inflation.
Obama also has asked the GAO to review the frequency and amount of premium increases in already-purchased policies, average lapse rates of policyholders, and the correlation between premium increases and lapse rates.
America’s Health Insurance Plans, Washington, and the American Council of Life Insurers, Washington, have responded to Obama’s letter by suggesting that the picture of the LTC insurance industry presented in the Times article is flawed.
