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IIPRC: Indiana to Opt Out of LTC Standards

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The Indiana Department of Insurance has told the Interstate Insurance Production Regulation Commission (IIPRC) that it will be opting out of new long term care (LTC) insurance standards.

Stephen Robertson, the acting Indiana insurance commissioner, has sent IIPRC Executive Director Karen Schutter a letter formally notifying her of the Indiana department’s decision to opt out of the standards.

The IIPRC is a body created by the National Association of Insurance Commissioners, Kansas City, Mo., that oversees an operation that takes in insurance filings for participating jurisdictions. The goal is to reduce the need for insurers to file similar forms in many different states.

The IIPRC approved new IIPRC LTC standards in August, during a joint meeting of the IIPRC and its management committee. In states that adopt the standards, they will apply only to new products filed with the IIPRC. The new standards will not apply to existing LTC products or to closed blocks of business.

Indiana is different from other states, because it is one of 4 states that participated in the original “LTC Partnership” pilot program, Robertson says.

The pilot program, and a national program based on the pilot program, encourage consumers to buy private LTC insurance by coordinating private LTC benefits

with Medicaid nursing home benefits.

Consumers normally must use up all or most of their assets to qualify for Medicaid. When consumers who buy policies that meet Partnership program standards exhaust private LTC benefits, they can use Medicaid to fill in the gaps without meeting the usual asset standards.

In Indiana, Robertson says, a consumer who buys an Indiana Partnership policy can choose between total-asset Medicaid protection or dollar-for-dollar protection.

“Also, all age brackets of consumers are protected with required inflation [protection] of either 5% compound or consumer price index,” Robertson says.

Indiana requires that non-Partnership policies sold in the state be comparable to Partership policies, and the Indiana department “believes that consumers are more protected when all LTC policy premiums are reviewed by [the department] pursuant to one review methodology,” Robertson says.

Because Indiana would still require all Partnership policies to be filed with the department, the IIPRC filing requirement would probably lead to duplicate filings and extra expense, Robertson says.