Testimony Given on LTC Rates at Joint Committee on Financial Services Hearing

| February 25, 2010 | Comments (0)

Good afternoon Mr. Chairman and members of the committee.  My name is Tobe Gerard. I am here today in 4 capacities: 1) As an owner of an insurance agency specializing exclusively in long term care insurance; 2) As a member of the Board of Directors of the Massachusetts Association of Health Underwriters 3) As a member of the National Association of Health Underwriters’ Long Term Care Advisory Committee; and 4) most importantly, as a consumer who is a long term care insurance policyholder. 

I speak to you today in support of Senate Bill 462 with regard to the enactment of our state version of the NAIC LTC Model Act and Regulation, as well as in support of House Bill 979 with regard to the protection of consumers in the purchasing of long term care insurance.


Senate Bill 462 would allow us to join with other states that have enacted standards for long term care insurance, and would enhance the role of the Division of Insurance in evaluating rate adequacy and reporting requirements by insurance carriers.  Though all 50 states have long term care insurance laws, my understanding is that Massachusetts is one out of only four states that does not have a state version of the NAIC LTC Model Act and Regulation. 


Senate Bill 462 sets minimum standards that insurance products need to meet to qualify as a long term care insurance policy.  In addition, passage of Senate Bill 462 and House Bill 979 will allow more attention to be focused on protecting consumers from rate instability. 


It will allow for more regulatory attention to be paid to filings for premium rate increases, and it will allow for stricter enforcement of rate stability.  All of this is necessary to protect the consumer.


Due to overly aggressive rate increases on the part of some long term care insurance companies, a number of Massachusetts residents are being priced out of a product they purchased with a great degree of foresight not even 10 years ago.  Consumers who weighed and measured their options and then made appropriate purchasing decisions should not be penalized. Rates on existing long term care insurance policies in Massachusetts have risen as much as 72.8%.  Considering skyrocketing health care costs, it is understandable that insurance companies would seek increased rates.  Under current economic realities, a 20% increase in long term care insurance premiums could be considered reasonable, but 72.8% seems opportunistic.


I urge you to pass Senate Bill 462 and House Bill 979 so that the consumers of Massachusetts can have confidence that the long term care insurance policies they are buying today will respond to their future needs appropriately.

As we are all living longer, long term care insurance has become a crucial insurance coverage to be included in the estate and financial plans of many Massachusetts consumers.

Tobe Lynn Gerard, CSA, CLTC, MBA
Tobe Gerard Insurance, L.L.C.

Category: Position Statements

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