Berkshire Senior Online

By Al Norman, Executive Director of Mass Home Care

Q: Does our state have a law regarding long term care insurance policies?

A: No. Massachusetts is one of only four states in the country that has not passed a law requiring minimum standards for long-term care insurance policies. In the absence of a law, the state has a set of regulations--but these rules only govern policies sold as "individual" policies, not group plans. As a result, as many as half the policies sold in this state are completely unregulated. The state does not even know what companies are selling group long term care insurance policies.

Long term care insurance is very complicated. But here are few basics: Individual long term care insurance policies in this state must: 1) provide at least 2 years (730 days) of benefit coverage. 2) not have a deductible greater than 100 days. 3) provide a benefit based on no more than 2 activities of daily living (like eating and bathing). 4) offer you inflation protection and a benefit if you cancel your policy. 5) only go back 6 months to find a pre-existing condition 6) not cancel a policy once you buy it. However, your policy premiums can be increased, and if you cannot comfortably afford the cost of these policies today, then you might not want to buy at all. In 1996, the average annual premium costs for individual and group policies sold in the Commonwealth were $1,784 and $807, respectively.

A recent report issued by State Senator Cheryl Jacques cautions the buyer to beware: "Because there is no legislation and lax regulations, Massachusetts consumers purchasing long-term care insurance policies are left without sufficient protection." The report warned that premiums can increase dramatically, claims can be denied, leaving policyholders with no right to a third party appeal, and policies can lack important home care features. There is no easy way for consumers to access key information that allows them to compare companies’ track record for providing quality coverage.

Some insurers are now selling "nursing home only" policies, which do not provide any coverage for in-home long-term care needs – care most seniors are far more likely to need. Such policies may also have a long deductible (up to one year), giving the purchaser very little benefit for their premiums. These "cheap" policies provide a "cheap" benefit that may do elders little or no good. The Jacques Report says insurers should have to provide consumers with information on how many policies they have sold, how much they pay each year in claims, how many policyholders drop their plans, how much rates have risen, and other comparative information.