Long term care insurers have done of poor job of pricing their products, according to Iowa Insurance Commissioner Susan Voss.
Insurers have often provided poor customer service, and Voss’s own division has sometimes fallen short when LTC policyholders have asked for help, Voss writes in the report, which was written for Iowa Gov. Chet Culver, D.
Culver asked for the report 3 months ago, after The New York Times and other publications wrote about problems with insurers’ handling of some LTC insurance claims.
LTC carriers have often underestimated claim rates while overestimating lapse rates, Voss writes in her report.
When policyholders and policyholders’ relatives call to complain or ask questions, carriers often leave them on hold for excessive periods of time or lose the documents they ask consumers to send, Voss writes.
The Iowa Insurance Division itself has sometimes failed to conduct thorough reviews of some policyholder complaints, Voss notes.
Voss says she has asked her staff to conduct a thorough review of closed cases in the division’s files to evaluate the extent of problem.
Voss recommends that Iowa should address shortcomings in LTC insurance and LTC insurance regulation by:
- Authorizing consumer-initiated LTC insurance rating hearings.
- Approving a prompt-pay law for LTC claims.
- Adopting the 2006 Long Term Care Insurance Model Act that was developed by the National Association of Insurance Commissioners, Kansas City, Mo.
- Requiring LTC insurance carriers to make a one-time offer to existing policyholders who have nursing-home-only coverage to sell them other benefits, such as home care benefits.