Consumers, Insurers Square Off Over Premiums For Long-Term Care

A proposal to limit the amount insurers charge for premiums on long-term care policies was criticized Thursday by insurers, but drew support from consumers and patient advocates.

Industry representatives said the field of long-term care is still evolving, and enough statistical data is not available to fairly lock in rates.

Consumers need the certainty of stable rates, countered individuals in a hearing conducted in Spokane by the state insurance commissioner’s office and state Sen. John Moyer.

They also want more assurances companies will pay up when claims are made, said Diane Hermanson, clinical director of Hospice of Spokane.

She recalled one Hospice client whose insurer first delayed, then denied payment for home health care shortly before the woman died.

Only the threat of legal action forced payment, Hermanson said.

The insurance commissioner will implement new rules governing long-term health care insurance later this month.

Marion Moos, a member of the Eastern Washington Council on Aging, said insurance companies are using the cap and coverage for pre-existing conditions to make threats to withdraw from the market.

The commissioner’s office, she said, should not concern itself with placating insurers.

But Carl Ogren, a Colfax insurance agent, said over-regulation will stifle competition and innovation as the industry tries to develop long-term care policies that respond to a growing demand for home health care and other alternatives to nursing homes.

Those who buy the policies, which typically cost between $1,000 and $5,000 a year, do so to protect their estates, not because they are concerned they will not be cared for, he said.

Sandpoint consultant Martin McBirney said long-term care insurance is a relatively new and rapidly evolving area.

After 20 years, he said, the industry is still trying to measure the risks entailed by providing coverage.

There are about 3 million long-term care policies in effect nationally, McBirney said. They are purchased, on average, at age 66, and claims are made at age 79.

Care for the elderly has been transformed in the last two decades, he said. Change also occurs in the period between the time a policy is purchased and the first claim made.

“The benefits they are paying are changing faster than their ability to quantify them,” McBirney said. “The companies are playing catch-up all the time.”

He said the industry will have a better handle on its financial exposure in another three or four years.

Deputy Insurance Commissioner Greg Scully said the state was proposing new rules because of the changes that have occurred since existing regulations went into effect in 1988.

Moyer said the Legislature may authorize the same examination of long-term care that the state’s health-care system received the last two years.

“We’re just barely on the brink of what we need to know about long-term insurance,” he said.