Volume 1, Issue 2

Meeting the Needs of Elderly Consumers: Proposed Reforms for the National Association of Insurance Commissioners’ Long-Term Care Insurance Model Act – Bruce A. Radke

Paying for long-term health care is a major concern of many elderly people. In his note, Mr. Radke explores what is becoming a major option in the health insurance field — long-term care insurance. He sees LTC insurance as a viable option to Medicare and Medicaid, which are not nearly adequate enough to meet the long-term needs of most of the elderly. In analyzing the product, Mr. Radke first explains some of its history, as well as the benefits generally associated with LTC insurance. Mr. Radke discusses a number of obstacles that have slowed the growth of LTC insurance. Mr. Radke explores the Long-Term Care Insurance model Act, promulgated by the National Association of Insurance Commissioners. He finds problems with several provisions of the Model Act and its ensuing amendments, including its lack of an adequate definition of LTC insurance, its eligibility criteria, and its failure to require mandatory inflation protection. Also, not all states have adopted the Model Act, and only a handful of those have adopted the 1990 amendments to the Model Act. Mr. Radke says recent attempts to federally regulate LTC insurance have failed, despite support from the NAIC and the General Accounting Office. To alleviate the problems with LTC insurance as it is offered today, he concludes by recommending a number of substantive changes to the NAIC Model Act. Finally, Mr. Radke calls on all fifty states to adopt the NAIC Model Act and take further steps to provide incentives for companies to offer LTC insurance and for elderly consumers to purchase the product.