April 16, 2018
Senator Steven Glazer
Senate Committee on Insurance
State Capitol, Room 2195
Sacramento, CA 95814
Support SB 1248
Dear Senator Glazer:
We applaud the introduction of SB 1248 that will establish a new minimum floor of benefits for the California Partnership for Long-Term Care.
California Health Advocates (CHA) is a not-for-profit organization dedicated to providing quality Medicare, Medicare Supplement, and long-term care insurance information, training, and education. CHA supports the local Health Insurance Counseling and Advocacy Programs (HICAP) with training, materials and technical assistance. CHA has been engaged for several decades in promoting high quality standards for long-term care insurance policies, both in our state legislature and as a consumer representative at the National Association of Insurance Commissioners (NAIC). I was one of the original members of the stakeholder group that created the Partnership Program and am currently a consultant to CHA.
The Partnership was intended to prevent or delay spending down to Medi-Cal by middle income Californians if they had to pay for a long-term care event. Partnership policies were of higher quality than those in the private market at the time. People who purchased one of these policies are allowed to subtract one dollar of their assets from future Medi-Cal spenddown requirements for every dollar their Partnership policy pays out in benefits. Over the years this has been good for purchasers, and has delayed or prevented spending down to Medi-Cal eligibility for some.
Since the beginning of the Partnership program in 1994 the market for long-term care insurance has changed dramatically. The Partnership program has not kept up with those changes. The administrative and regulatory process of making substantive changes to the program has hindered the ability of the Partnership to keep up with fast moving changes to long-term care insurance products. As a result the Partnership has fallen further and further behind the private market, causing companies to drop out of the program and leaving few options for Californians who might want a Partnership policy.
This legislation will allow companies to sell a minimum benefit package at much lower cost that is similar in many respects to newer products on the market today. Companies may be more willing to join or rejoin the Partnership program with a minimum threshold of benefits that will result in lower premiums and greater affordability.
We think it will be important as the bill moves through the process to have specific language to ensure that the Partnership program develops new public education and marketing materials, and new consumer materials to adequately explain the new product design, strategies for financing long-term care costs, and specifics of Partnership products. Agents will also need new materials and updated training and education to explain the new benefit thresholds to counsel buyers on the most appropriate benefit package.
We appreciate the introduction of SB 1248 and look forward to working with you and Senator Gaines as the bill moves through the process.
Training and Policy Specialist