A team of state insurance regulators may soon begin work on a model law that states could use to set rules for short-term care insurance policies.
The Senior Issues Task Force, part of the Kansas City, Missouri-based National Association of Insurance Commissioners, is looking into the idea of setting up a new Short Duration Long-Term Care Policies Subgroup.
The subgroup would work on creating a model to “address long-term care products of short duration” that are excluded from the NAIC’s existing long-term care insurance models but do not fit well under the NAIC’s model law and model regulation for accident and sickness insurance.
The task force has put creating the subgroup on its agenda for a session at the NAIC’s upcoming fall meeting. The session is set to start at 2 p.m. Dec. 10 in Miami.
The federal government leaves regulation of most insurance matters to the states.
The NAIC is a group for state insurance regulators. The group does not have the direct ability to set state laws or regulations, but states use NAIC models, or examples of what insurance, laws and explanatory materials might look like, to develop their own insurance laws, regulations and guidance.
The NAIC models for long-term care insurance apply to products that cover nursing home care, home health care and other forms of post-acute care for periods of one year or more.
The accident and sickness models apply to health-related insurance products, such as dental insurance and disability insurance, that fall outside the scope of the NAIC’s major medical insurance models and long-term care insurance models.
The Senior Issues Task Force recently created a Short Term Health Policies Providing Long-Term Care Benefits Subgroup to talk about the idea of creating model.
A separate model
The NAIC appoints representatives from consumer groups to speak for consumers in NAIC proceedings. Some of the consumer reps, including Bonnie Burns of California, have argued that marketing practices for some short-term care insurance policies may be misleading, and that some policies might provide too little value to justify their premiums.
Other insurance policy watchers have suggested that short-term care insurance policies might need separate rules because some concerns affecting long-term care insurance have no bearing on short-care insurance.
Mary Ellen Breault of Connecticut said in October, at a short term health policies subgroup conference call meeting, that Connecticut has set different rules for short-term care insurance policies than for long-term care insurance policies, because there is no practical way for issuers to change the rates on in-force policies, according to a call summary included in a meeting packet.
During a conference call in November, Mary Mealer, a Missouri regulator who serves as the subgroup chair, said 28 states responded to a short-term care insurance survey. Twenty-two states said they approve the products.
Thirteen states want to move toward regulating the products using the NAIC long-term care insurance models. Four states want to create a separate model, and eight states want to avoid either moving to a new short-term care insurance model or using the long-term care insurance models to regulate the products, according to a summary of Mealer’s remarks.
The existing subgroup wants to disband and have the task force set up a new subgroup to develop a separate short-term care insurance model, according to a call summary.
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