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Senate Investigates LTC Insurance Rate Hikes

Tue, 09/12/2000 - 11:00pm — Karen Stevenson
Description: 

Senator Chuck Grassley, chairman of the Special Committee on Aging, is a proponent of long-term care insurance and is the sponsor of legislation to give people tax incentives to buy the policies. However, he feels a responsibility to protect consumers from unanticipated long-term care insurance premium increases, and is holding a hearing to discuss ways to protect consumers from unreasonable rate hikes.

Senator Grassley states, "A federal tax break would stimulate long-term care insurance sales. It also would indicate to consumers that such policies are safe and government-endorsed. As the sponsor of that legislation, and as a strong believer that private long-term care insurance should be part of everyone's planning for retirement, I believe I have a special responsibility to ensure that consumers are protected when they buy a policy. A federal tax break amounts to a government seal of approval. An insurance policy should be worthy of that seal. Long-term care insurance is a great concept. It will help a lot of people. We have to make sure it's a great product."

"Today's testimony supports my instinct that we should protect long-term care insurance consumers from large, unexpected rate increases. When people are priced out of their policies, they lose the money they paid in premiums. And they have a terrible time getting insurance with another company. I want to prevent those hardships. As I mentioned at the outset, I'm the principal sponsor of legislation establishing a federal tax incentive for those who buy long-term care insurance. Therefore, I plan to amend my bill, S. 2225, the Long-Term Care and Retirement Security Act of 2000, to include a consumer protection provision. The amended bill will require that long-term care insurance plans billed as federally qualified plans include a provision that protects consumers of these policies from unexpected and extreme rate hikes."

The hearing features a representative from the National Association of Insurance Commissioners, which is working on a rate stabilization plan; a lawyer who has filed several class-action lawsuits on behalf of policyholders; and insurance industry representatives.

Senator Chuck Grassley, chairman of the Special Committee on Aging, is a proponent of long-term care insurance and is the sponsor of legislation to give people tax incentives to buy the policies. However, he feels a responsibility to protect consumers from unanticipated long-term care insurance premium increases, and is holding a hearing to discuss ways to protect consumers from unreasonable rate hikes.

Senator Grassley states, "A federal tax break would stimulate long-term care insurance sales. It also would indicate to consumers that such policies are safe and government-endorsed. As the sponsor of that legislation, and as a strong believer that private long-term care insurance should be part of everyone's planning for retirement, I believe I have a special responsibility to ensure that consumers are protected when they buy a policy. A federal tax break amounts to a government seal of approval. An insurance policy should be worthy of that seal. Long-term care insurance is a great concept. It will help a lot of people. We have to make sure it's a great product."

"Today's testimony supports my instinct that we should protect long-term care insurance consumers from large, unexpected rate increases. When people are priced out of their policies, they lose the money they paid in premiums. And they have a terrible time getting insurance with another company. I want to prevent those hardships. As I mentioned at the outset, I'm the principal sponsor of legislation establishing a federal tax incentive for those who buy long-term care insurance. Therefore, I plan to amend my bill, S. 2225, the Long-Term Care and Retirement Security Act of 2000, to include a consumer protection provision. The amended bill will require that long-term care insurance plans billed as federally qualified plans include a provision that protects consumers of these policies from unexpected and extreme rate hikes."

The hearing features a representative from the National Association of Insurance Commissioners, which is working on a rate stabilization plan; a lawyer who has filed several class-action lawsuits on behalf of policyholders; and insurance industry representatives.