STATE
NAIFA supports the addition of Public-Private Long Term Care Insurance (LTCi) programs to the market so long as the programs are in line with NAIFA's policy positions for public programs. NAIFA believes that to facilitate the future viability of private LTCi products, appropriate incentives are necessary to encourage the continued development of the private long-term care (LTC) market. Agents play a critical role in meeting the needs of the LTCi marketplace and should continue to be a part of the conversation.
Long- Term Care (LTC) continues to be a hot topic of conversation. Medicare does not cover the cost of custodial care, and Medicaid generally supports low-income individuals. Between 2022 and present day, Pennsylvania, New York, California and Washington have proposed legislation to enact state-run Long-Term Services and Supports programs. Hawaii and Massachusetts have passed and enacted legislation to establish commissions to conduct a study on these programs.
Washington is the first state to have a fully active Long-Term Services and Support program – WA CARES. On July 1, 2023, Washington workers began contributing 0.58 cents for every $100 of their wages to the WA Cares fund to eventually accrue a long-term care benefit of up to $36,500. This benefit becomes accessible after 10 years of contributing. As soon as a worker reaches retirement, they stop contributing. All full-time, part-time, and temporary workers in Washington contribute to the WA Cares Fund, unless they have an approved exemption. Self-employed workers only earn benefits if they opt in. In 2022, legislation was enacted to allow voluntary exemptions to prevent patchwork changes that undermine the stability of the private market policies.
NAIFA supports private long-term care insurance playing a significant role in the financing of LTC services for elderly family members and relatives. NAIFA will advocate for a public/private partnership for any state-run Long Term Care programs to ensure consumers can still take advantage of the private market. To incentivize consumers, states have proposed tax incentives for premiums paid on LTCI.
NAIFA recognizes that states are likely to prefer programs with front-end claim coverage, which provides benefits payable at the beginning of an individual’s eligibility period but are limited to a maximum dollar amount, time, or both.
The NAIFA State LTC Legislative Working Group meets monthly to explore and recommend policy positions for NAIFA to pursue through its government affairs capabilities. NAIFA engages directly with state lawmakers and regulators and plays a significant role in shaping policy and serving as a resource of information. The Working Group closely monitors any and all updates from Washington state’s WA Cares Fund and California Long Term Care Insurance Taskforce, as well as state level LTC and LTCi legislation.
NAIFA plans to fully engage on state and regulatory issues. This includes working with the NAIC Long-Term Care Insurance Model Update Subgroup that is currently reviewing the compatibility of the existing Long-Term Care models (#640) and (#641) with the current LTCI marketplace. To assist this effort, NAIFA has established a State LTC Legislative Working Group to collect and formalize input from members who specialize in this field of insurance, as well as outside issue experts. Collective thinking and discussions on current product availability, innovation, and policy challenges are invaluable to NAIFA’s advocacy efforts.
FEDERAL
NAIFA supports proposals to increase consumer options in the LTCI market and incentivize the purchase of LTCI coverage. Congress should enact legislation to facilitate access to LTCI such as permitting workers to buy LTCI with contributions to their employer-sponsored flexible spending accounts (FSAs) and enacting tax incentives to encourage the purchase of LTCI. Such reforms would help ensure Americans have LTCI coverage that will enable them to maintain their independence and protect them from devastating long-term care costs.
NAIFA encourages insurers to make available, where appropriate, non-forfeiture benefits. NAIFA recognizes that the traditional LTCi policy market has suffered, and that pricing adjustment may be needed to protect policyholders from losing coverage due to the potential for insurer insolvency. Accordingly, NAIFA supports reasonable efforts by states and insurers to provide workable solutions for policyholders in this scenario, so long as specific consumer protection and disclosure requirements are met.
NAIFA opposes the use of loss ratios as a mechanism to determine the value of a long-term care policy.
Resources
STAFF
Carroll Golden
Executive Director NAIFA Limited and Extended Care Center
Roger Moore
NAIFA Policy Director
