Contact: Beth Scott
Tallahassee - Florida lawmakers yesterday approved a monumental senior protection bill that provides marketplace reforms that make Long-Term Care Insurance (LTCI) affordable, available, and marketable. House Bill 947, by Rep. John Legg (R-Port Richey), Rep. Frank Farkas (R-St. Petersburg), Sen. Mike Fasano (R-New Port Richey), and Sen. Durell Peaden (R-Crestview), was unanimously passed by the Florida House of Representatives 114-0 and the Florida Senate 38-0.
The market reforms provided by the bill are designed to restore confidence in the LTCI market and increase overall sales which have declined in recent years due to problems in the market.
The legislation establishes a Long-Term Care Partnership Program with Medicaid, which provides seniors incentives to purchase more affordable Long-Term Care Insurance, by allowing them to protect their personal assets in an amount equal to the benefits provided by their policy from Medicaid spend-down requirements.
As a result of the bill, seniors will know that their insurer did a thorough job of reviewing their application and that they will be protected from post-claim underwriting or any frivolous allegations of fraud when they apply for benefits. Under current law, if an insurance company merely alleges fraud, a senior is denied benefits under their policy until a legal settlement is reached (often, seniors and their families settle for a lesser benefit than they originally purchased in their policy). If there are any questions about the information contained in an application, the insurers will investigate before issuing the policy, and up to two years after issuance. This ensures that the senior will be mentally competent, and his or her agent and any medical providers will be available, to answer questions about the application and medical records. Many times, a senior loses the ability to retrieve original medical evaluations and records if the insurer waits 15 or more years until the time of claim to raise any questions about the application.
"Seniors who have diligently paid premiums over the life of the policy can now be confident that, when they file a claim, the coverage will be there," said sponsor, Rep. Frank Farkas.
Seniors and their families will know they are protected from excessive rate increases in the future that result from an insurer choosing to close a block of business and sending it into a rating "death spiral." Certain insurers have asked for annual rate increases in excess of 200 percent on policyholders that are in excess of 80 years old.
"This legislation provides rate relief to our seniors so they can continue to receive the care they need," said Insurance Commissioner Kevin McCarty.
Seniors will know that, in the event of justifiable rate increases, they will have options to reduce benefits or cancel their policy but at least walk away with a paid up policy equal to the amount of premiums that they have already paid. This is already available to seniors that purchased an LTCI policy after March 2003; however, at that time, the Legislature did not include the same protections to policies already in force.
"The contingent benefits provided by this bill ensure seniors have consumer choice and will be able to receive alternative benefits in the event of a rate increase," said sponsor, Sen. Mike Fasano.