It’s time for government to act on costs of long-term care

Sen. Chris Marr

When Spokane resident Wanda Flood purchased long term care insurance in 1996, 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 some 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 granted repeated increases in the premiums they are allowed to charge their clients for existing policies. 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.

At this time, only 4.4% 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 Office of the Insurance Commissioner consistently rubber stamps unjustified and unprecedented rate increases.

One company in particular, Conseco Senior Health, has been approved for 14 rate increases in the last five years by the Washington Office of the Insurance Commissioner. 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 may say that 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 because of skyrocketing premiums and spiraling benefits, they are at an age where finding new coverage is no longer an 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 healthcare of people who have already paid for long term care insurance. That responsibility lies with the insurance companies who 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 nursing homes to discuss the issue of long term care insurance and the extraordinary rate hikes that are being granted to some insurance carriers by the OIC.

During that meeting, several proposals were suggested to rectify the current situation, and I intend to move forward with each of them.

Next legislative session, I will work for Senate approval of HB 1086, sponsored by Rep. Dawn Morrell (D-Puyallup), a bill that permits adoption of the provisions of the National Association of Insurance Commissioners Model Act and regulations. These regulations can help protect people currently entering the long-term care insurance market.

I also support the creation of a task force made up of stakeholders and legislators with an eye toward coming up with specific recommendations to help resolve some of the issues I’ve described. 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 in order to add a greater percentage of 40-somethings to the list of policyholders.

As the former chair 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. I am dedicated to ensuring that patients who pay for long-term healthcare insurance get the medical care they’re entitled to, and to making sure that taxpayers aren’t stuck paying the bills.

Sen. Chris Marr, D-Spokane, is a member of the Senate Health & Long-Term Care Committee and represents the 6th Legislative District.

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