SENATE BILL REPORT

SHB 777

BYHouse Committee on Financial Institutions & Insurance (originally sponsored by Representatives Lux, Zellinsky, Dellwo, Nutley, Day, Meyers, Chandler, Leonard, Locke, K. Wilson, Taylor, Lewis, Cole, Rasmussen, Sprenkle, Madsen, May, Rayburn and Jesernig)

Prohibiting provision in insurance policies which condition benefits on an insured being admitted for over three days to the hospital.

House Committe on Financial Institutions & Insurance

Senate Committee on Financial Institutions

Senate Hearing Date(s):

Senate Staff:Phil Sorensen (786-7470)

AS OF MARCH 27, 1987

BACKGROUND:

The Long Term Care Insurance Act sets minimum standards for nursing home insurance contracts and similar long term care insurance policies. The House passed the Act containing a prohibition on the use of a "prior hospitalization" provision in such policies. Such provisions require the policyholder to have spent a certain number of days in the hospital in order to become eligible for policy benefits. The Senate deleted the prohibition on the use of such provisions and the Act was adopted without the prohibition or any other limitation on the use of such provisions.

SUMMARY:

No long term care insurance contract may contain a "prior hospitalization" provision that requires a stay of longer than three days in order to qualify for policy benefits.  No long term care contract issued or renewed on or after January 1, 1989, may contain a "prior hospitalization" provision that requires a stay of any duration unless the insurer can actuarially prove that the provision is necessary and no other reasonable alternative is available to prevent overuse of benefits.

Fiscal Note:    none requested