California Warns Against Dishonest Marketing Tied to Long-Term Care Proposal

The California Department of Insurance wants marketers to stop using the state’s efforts to start a public long-term care benefits program to scare people into buying private long-term care insurance now.

California Insurance Commissioner Ricardo Lara sent out an agent and broker alert calling some insurers’ and agents’ marketing misleading.

“These communications falsely assert that a new payroll tax will be imposed in the near future, and that consumers should rush to buy long-term care insurance before the end of 2023,” Lara said in the alert, which was posted on the website of California Health Advocates, a nonprofit organization that helps California residents use their Medicare coverage. Lara did not say who sent out the communications.

Lara said California will “take appropriate steps” to protect consumers from dishonest, fright-based marketing.

What It Means

If you have retail clients in California or nearby states, some may believe — incorrectly — that California is already setting up a public LTC program.

The History

Washington state now has a public LTC benefits program funded by payroll taxes. Lawmakers let residents who had private LTCI coverage in place by Nov. 1, 2021, opt out of the public program.

California’s Long Term Care Insurance Task Force is preparing to present its public LTC program recommendations to state lawmakers in January.

State lawmakers have not debated whether any LTC program created would include a payroll tax.