DCBS Media Release
March 16, 2005
New rules to enhance protection of long-term-care insurance consumers
(Salem) Rules recently adopted by the Department of Consumer & Business Services will give added protection to Oregon consumers who purchase insurance for long-term care. These rules should help consumers by providing greater predictability for rates, better disclosure of policy terms, improved consistency with other states, and other measures intended to bring the rules up to date with the current insurance market.
"Long-term-care insurance becomes increasingly important as our population ages," DCBS Director Cory Streisinger said. "These new rules are intended to address issues we have seen in this market over time, and to make sure that policyholders have the information and flexibility they need to secure coverage that meets their needs."
The DCBS Insurance Division proposed the new rules to correct problems that have arisen in long-term-care policies sold over the past twenty years. They require that insurers:
"In general, the new rules make Oregon more consistent with model rules developed by the National Association of Insurance Commissioners and used as a basis for rules adopted by most states," DCBS Insurance Administrator Joel Ario said. "Consistency in long-term-care rules is especially important, because the coverage is portable if the policyholder moves to a different state."
In addition to the changes described above, Oregon's new rules include numerous technical updates to the existing rules.
Long-term-care insurance covers a variety of medical, personal, and social service expenses for people with chronic illness or disabilities who have problems living independently. Services can range from in-home care to adult day care to residential care. These services can be very expensive, and standard health insurance policies cover few of them. Medicare does not cover long-term care and Medicaid and veterans' benefits can only be used by qualifying individuals, so consumers should review their finances and options carefully to determine whether long-term-care insurance would be right for their circumstances. Premiums for long-term care policies that meet certain federal requirements are deductible from state and federal income taxes, and benefits from those policies are exempt from taxation.
Many provisions of the new long-term care rules went into effect March 1, 2005. Others go into effect over the next year, depending on implementation requirements for insurers. For more information consumers should contact the DCBS Insurance Division at 503-947-7984 or leave a message toll-free at 1-888-877-4894. Information is also available on the Web at www.insurance.oregon.gov. Insurance Division staff can answer questions or help with complaints against insurers or agents.