BP BHEAD INT S

AN ACT Relating to long-term care insurance; adding a new section to chapter 48.84 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that the citizens of Washington state are concerned about the costs of long-term care. A significant amount of long-term care costs are provided at public expense, adding to the costs of the health care system. Many individuals are driven to poverty, depleting their assets to pay for long-term care.

One method of providing for adequate long-term care is the purchase of private long-term care insurance coverage. In recent years, many insurance products have been developed to provide such coverage.

However, consumers wishing to purchase long-term care insurance are often faced with an array of difficult to understand provisions, and, in many cases, the policies they purchase may not include the protection they hoped to achieve.

The legislature finds that, in order to conserve public resources and encourage the accessibility of long-term care insurance, clear, accurate, and understandable disclosure of the provisions of the policies marketed in Washington state is essential. Informed consumers can then make optimal choices for themselves.

NEW SECTION. Sec. 2. A new section is added to chapter 48.84 RCW to read as follows:

(1) The commissioner shall develop, with public input, minimum standards in rule for a model basic long-term care insurance policy, with a reasonable number of optional supplemental benefit plans. The minimum standards of the basic long-term care insurance benefit policy shall be modeled after the minimum standards in chapter 48.66 RCW for the standard medicare supplement benefit plans available in this state under RCW 41.05.195.

(2) The minimum standards shall include, without limitation:

(a) Clear, accurate, concise, and simple statements for the consumer about the policy being marketed, including the following elements:

(i) The dollar amount of the daily benefit payable under the policy, and whether the amount is payable to the policyholder or to providers.

(ii) The policy's deductible or elimination period, in effect before benefits become payable.

(iii) Whether the policy contains inflation protection, and, if so, how the amount is determined.

(iv) Whether the policy includes home health care services, and if so, what type of home health care is covered.

(v) Whether covered home health care includes care in settings other than the consumer's personal residence, such as adult family homes or adult day care or other alternatives to skilled nursing facilities.

(vi) Whether the policy has exclusions of coverage for specific medical conditions, such as Alzheimer's disease, conditions arising from alcohol abuse or illegal drug use, or suicide attempts.

(vii) Whether the policy provides for nonforfeiture of benefits, and, if so, the additional premium cost if any of the nonforfeiture provision.

(viii) Whether the policy is guaranteed renewable.

(b) A description of how the long-term care policy differs from supplemental medicare, also known as, "medi-gap" insurance.

(c) The opportunity for the consumer to designate three nonliable persons who shall receive written notice if the policy is about to lapse for nonpayment of premium.

(d) The requirement that the person offering the insurance policy for sale must present, at the point of initial sales contact, an accurate statement of the most recent objective rating of the insurer's financial condition, such as Moody's Investors Service, A.M. Best's, Duff and Phelps, or Standard and Poor's, or other generally accepted, independent rating, not generated by the insurer itself.

(e) In addition to other written disclosure required, the salesperson must provide the consumer with a copy of the national association of insurance commissioners "Shopper's Guide," or a similar book produced by the commissioner, at the same time that any other written information is provided to the consumer.

(3) An accelerated death benefit option shall be included as a feature in at least three of the long-term care plans approved for offering in Washington state.

(4) The commissioner shall report to the health policy committees of the senate and house of representatives by December 1, 1994, on the development of the standards and recommend any statutory changes that may be necessary to implement the standards.

(5) The governor shall seek the federal government's enactment of long-term care insurance premium deductibility for federal income tax purposes.