The Federal Role in Consumer Protection and Regulation of Long-Term Care Insurance

This paper reviews the current status of consumer protection issues associated with private long-term care insurance. It examines possible roles that the Federal Government might play in this area. The views of a panel of experts drawn from government, industry, academia, and consumer organizations are reported. The panel concluded that the Federal Government could make an important contribution by educating consumers about long-term care insurance and related issues. Clarifying the tax status of these products, collecting better data on the risk of long-term care, and expanding the capabilities of state insurance departments would also help. The panel did not reach consensus on whether certain specific features should be required on all policies (e.g., inflation protection and non-forfeiture benefits). These issues are currently under review by the National Association of Insurance Commissioners Long-Term Care Task Force. [90 PDF pages]