Insurance regulators in a Northwestern state have tried to make life a little easier for long-term care insurance (LTCI) providers that want to tie inflation protection to growth in the Consumer Price Index (CPI).
The insurance commissioner’s office in Washington state has updated the CPI inflation protection standard for insurers that participate in the state’s Long-Term Care Partnership program.
A partnership program gives a state a way to encourage consumers to buy private LTCI, by coordinating the private LTCI benefits with Medicaid nursing home benefits.
To sell LTCI coverage as partnership coverage, an insurer must meet coverage quality standards. In Washington state, a partnership policy must protect the holder against inflation. The protection come in the form of automatic annual inflation increases of at least 3% or in the form of automatic inflation increases linked to changes in the CPI.
In the past, the assumption was that the CPI would always go up, perhaps by a lot.