GAO Report On LTC Insurance Stirs Concern In Congress

“The very high costs of long term care make it smart public policy to help people manage their financial risk with long term care insurance policies,” said Sen. Chuck Grassley, R-Iowa, ranking member of the Senate Finance Committee. “It’s also important to make sure these products are viable and don’t leave consumers with big premiums and little security. This new report provides helpful information for federal and state lawmakers, regulators and consumer watchdogs in meeting that challenge.”

The GAO found wide fluctuations in rate increases for LTCI policies between different states and plans. As an example, it cited one company that repeatedly raised premiums to a cumulative increase of 70% since 1991, and another that had only one premium increase in the last 33 years. Roughly half of the states have adopted some form of rate stability measures, but the report noted that this leaves the rest of the country unprotected, and that regulators in states with the standards are often still unsure of how useful they will be in moderating future increases.

“The GAO’s findings and our own committee staff’s investigation have identified troubling weaknesses in the states’ ability to protect consumers from abusive practices,” said Rep. John Dingell, chairman of the House Energy and Commerce Committee. “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.”