Bonnie Burns, our Training and Policy Specialist, submitted the following letter in support of Senator Richard Roth’s bill SB 1342. This bill would require a new minimum amount of inflation protection for long-term care insurance policies under the California Partnership for Long Term Care. See the bill text for full details, and see Burns’ letter below.
March 27, 2020
Senator Richard D. Roth
State Capitol, Room 2080
Sacramento, CA 95814
Support: SB 1342
Dear Senator Roth:
California Health Advocates (CHA) strongly supports your bill, SB 1342.
CHA is a not-for-profit organization dedicated to providing quality Medicare, Medicare Supplement, long-term care insurance information, and supports the work of local Health Insurance Counseling & Advocacy Programs (HICAP) providing benefits counseling and community education on Medicare and long-term care with training, education, technical assistance. CHA has supported quality standards and consumer protections in long-term care insurance products for decades, and promotes high regulatory standards for long-term care insurance in the state legislature and at the National Association of Insurance Commissioners (NAIC).
CHA has been actively involved in the California Partnership for Long-term care since the creation of the program, and more recently as a participant in the short lived task force that created new minimum product standards for Partnership long-term care policies.
We have been dismayed at the lack of insurer participation since those minimum benefits were adopted by the task force. Your bill establishes those minimum benefits in state law so insurers can submit products for approval by the Partnership. These minimum benefits will result in lower premium costs and greater affordability for those in the target market of the Partnership while still maintaining strong standards and consumer protections.
We have been alarmed at the lack of training courses approved by the Partnership since the development of those minimum benefits standards. Many people who previously bought a Partnership product need help with deciphering options they’ve been offered to lower the cost of a premium increase without losing their Partnership status. At least some of those policyholders could benefit from a lower minimum daily benefit amount and a reduced amount of inflation protection that will allow them to retain Partnership protections.
However, since there are no new education courses approved or offered to agents by the Partnership agents cannot satisfy the Partnership requirement for training that would allow them to counsel policyholders on those more affordable options. That leaves agents who have a fiduciary responsibility to their clients without the necessary training to satisfy that fiduciary responsibility, or to satisfy the Partnership requirement for current training sell lower cost products to their clients, or counsel clients whose premiums are increasing. Agents are currently in a catch 22.
With the urgency requirement in your bill the Partnership can, upon passage of your bill, approve courses that contain information about these new minimum benefits, and allow policyholders the option to reduce coverage without losing their Partnership protection.
We strongly support the important changes incorporated in you bill and thank you for introducing this important legislation.
Bonnie Burns, Policy Specialist
California Health Advocates