When Spokane resident Wanda Flood purchased long-term care insurance in 1998, she thought she was doing the right thing to guarantee that she and her husband would get the care they needed as they got older.
Instead, she finds herself stuck with increasingly higher annual premiums, a policy that drops in value with each passing year and serious questions about whether her husband will be granted his benefits.
Wanda and many others like her are caught in the middle as a handful of providers of long-term care insurance are repeatedly granted increases in the premiums they are allowed to charge their clients.
In an attempt to keep their costs down, consumers like Wanda sometimes opt for fewer benefits. The result is that long-term care insurance policies acquired a decade ago are now so expensive and the benefits so reduced, that the policies are virtually worthless.
Right now, only 4.4 percent of adults 45 and older have purchased long-term care insurance. From a public policy standpoint, we’d like to see that number grow. But that can’t happen as long as the Washington Office of the Insurance Commissioner consistently rubber-stamps unjustified and unprecedented rate increases.
One company, Conseco Senior Health, has been approved for 14 rate increases in the past five years by the OIC. This kind of behavior gives a black eye to the entire industry and certainly doesn’t encourage baby boomers to purchase the policies intended to insulate them from high health care costs as they age.
Some say this is an issue for the free marketplace to take care of, but it’s not a simple issue of consumers’ rights. This has implications for us all.
By the time customers decide to drop their long-term care insurance due to skyrocketing premiums and spiraling benefits, they are at an age where finding new coverage is no longer an affordable option. If forced to turn to Medicaid, their expensive long-term health care becomes the state’s responsibility.
Taxpayers should not have to pay for the health care of people who have already paid for long-term care insurance. That responsibility lies with the insurance companies that have collected years’ worth of premiums with the promise of providing a benefit to their clients.
I recently met with other state legislators, Insurance Commissioner Mike Kreidler, long-term care insurance professionals and a representative of Washington’s nursing homes to discuss long-term care insurance and the extraordinary rate hikes now granted to some insurance carriers by the OIC.
During that meeting, several proposals were suggested to rectify the situation, and I intend to move forward with each of them.
Next legislative session, I will work for Senate approval of House Bill 1086, sponsored by state Rep. Dawn Morrell, D-Puyallup, a measure that permits adoption of the provisions of the National Association of Insurance Commissioners Model Act and accompanying regulations. These regulations can help protect people now entering the long-term care insurance market.
I also support creation of a task force composed of stakeholders and legislators with an eye toward coming up with specific recommendations to help resolve these issues.
We need to see public notification of rate increase requests and opportunities for consumers to comment. We also must look at providing incentives to grow the long-term care insurance market to add a greater percentage of 40-somethings to the list of policyholders.
As the former chairman of a Spokane hospital board, I’ve experienced the economic impact of a health care system serving the uninsured, and the consequences to those without coverage. We must ensure that patients who pay for long-term health care insurance get the medical care they’re entitled to, and to making sure that taxpayers aren’t stuck paying the bills.
State Sen. Chris Marr, D-Spokane, is a member of the Senate Health & Long-Term Care Committee and represents Washington’s 6th Legislative District.
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