The most senior Republican on the Senate Finance Committee says government interest in private long term care insurance depends on insurers paying benefits smoothly enough to keep policyholders from collecting Medicaid nursing home benefits.
Sen. Charles Grassley, R-Iowa, has sent a letter seeking detailed claim-handling information from 11 long term care insurers.
The list of recipients includes top executives at CNA Financial Corp., Chicago; Conseco Inc., Carmel, Ind.; Genworth Financial Inc., Richmond, Va.; Life Investors Insurance, Cedar Rapids, Iowa, a unit of AEGON N.V., The Hague, Netherlands; Manulife Financial Corp., Toronto; MetLife Inc., New York; New York Life Insurance Company, New York; Mutual of Omaha Insurance Company, Omaha, Neb.; Penn Treaty American Corp., Allentown, Pa.; Prudential Financial Inc., Newark, N.J.; and Unum Group, Chattanooga, Tenn.
Grassley also is asking the U.S. Government Accountability Office to review the long term care insurance industry.
The GAO investigation should include “a review of whether state insurance enforcement agencies are properly and promptly investigating reports of long-term care insurance claim denials,” Grassley writes in a letter to the GAO.
In the letter to the insurers, Grassley refers to the March New York Times article about LTC insurance claim payment complaints.
“It is reported that there are many overly burdensome obstacles that make it difficult to receive coverage for insurance claims,” Grassley writes. “For instance, the article notes that many long term care policyholders are confronted with draconian policies that deny claims for minute administrative errors such as failing to submit unimportant paperwork, filling out wrong forms after receiving them from the insurance company, and the company failing to recognize an approved facility.”
Grassley implies in his letter that LTC insurance claim problems could affect federal LTC insurance tax breaks and state LTC insurance partnership programs.
Private LTC insurance policies could help reduce the burden of LTC costs on Medicaid and other public health programs, but, “if insurance companies are making it more complicated to recoup claims, this may force seniors into an already financially burdened Medicaid program, thereby increasing program costs,” Grassley writes.
Grassley says in a separate statement about the letter that the purchase of private LTC insurance coverage “has been encouraged through federal tax incentives” and through expansion of the LTC insurance partnership program.
The partnership program permits states to coordinate private LTC insurance benefits with Medicaid nursing home benefits to help insureds who exhaust private LTC insurance benefits save some assets before qualifying for Medicaid nursing home benefits.