Deputy Commissioner Mary Beth Senkewicz Testifies on Long-Term Care Insurance
– Florida Deputy Insurance Commissioner Mary Beth Senkewicz offered testimony
on Wednesday, October 14 before a joint hearing held by the U.S. Senate Special Committee on Aging and the Subcommittee on Oversight of Government Management, the Federal Workforce and the District of Columbia on the issue of long-term care insurance (LTCI).
Deputy Commissioner Senkewicz officially testified on behalf of the National Association of Insurance Commissioners (NAIC), as chair of the NAIC’s Senior Issues Task Force. She also discussed Florida’s experience with LTCI, which is designed to assist with expenses for long-term care services when an insured becomes chronically ill.
After her testimony, Deputy Commissioner Senkewicz stated: “Long-term care insurance has evolved rapidly since its inception in the 1980s. It started as nursing home-only coverage, and now provides a much greater variety of services, including home health care, adult day care and assisted living.” She continued, “The companies made assumptions in pricing that proved erroneous, and instituted sometimes substantial rate increases. Consumers, especially our seniors, need to be protected and informed.”
The hearing was spurred by the recent news that the majority of enrollees in the Federal Long-Term Care Insurance Program have received notice of a twenty-five percent rate increase effective in January. Deputy Commissioner Senkewicz outlined the steps taken by the NAIC, and the State of Florida, to ensure rate stability and consumer protection in the long-term care market. This included adding provisions to the NAIC Long-Term Care Insurance Model Regulation that require companies to adequately price the product initially so that no rate increases are anticipated during the life of the policyholder. This model regulation expands consumer disclosures, and focuses on the possibility that rates for these products can possibly increase in the future. She noted that Florida has gone even further, enacting protections that eliminate “death spirals” or rapid rate increases for long-term care products. Florida law provides these protections prospectively to policies purchased after March 1, 2003.