Consumer group pans LTCI rescue efforts

A group that speaks for consumer interests at the National Association of Insurance Commissioners for years says the NAIC should give up on trying to save stand-alone long-term care insurance.

The Center for Economic Justice says state insurance regulators should instead encourage insurers to add long-term care benefits to products that protect consumers against other types of risk.

Related: 7 (relatively) easy insurer ideas for saving long-term care insurance

The Austin, Texas-based group made that argument in a comment letter sent to the NAIC’s Long-Term Care Innovation Subgroup. The subgroup posted the letter on its section of the NAIC’s website Tuesday.

The NAIC is a Kansas City, Missouri-based group for state insurance regulators. The Health Insurance and Managed Care Committee, a major arm of the NAIC, formed the LTC Innovation subgroup to come up with ideas for improving the state of the market for private stand-alone long-term care insurance.

Issuers have argued that factors such as competition from Medicaid nursing home benefits, low levels of consumer awareness of long-term care risk, and rigid, complicated state regulations have made offering affordable, sustainable stand-alone LTCI difficult. Issuers have also complained that years of very low interest rates on high-quality bonds and insurers’ inaccurate ideas about how stand-alone LTC might work have hurt the profitability of LTCI products.

The LTC Innovation subgroup has held a series of conference calls over the past year to hear from insurance company executives, trade group representatives and others about proposals for overcoming those problems.

Related: 6 ideas for this week’s big long-term care hearing

The Center for Economic Justice is encouraging the sale of simple, broad insurance and retirement products. (Photo: iStock)

The Center for Economic Justice contends that the subgroup members should take a different approach.