Washington, D.C. - Responding to published reports of double-digit increases in long-term insurance policies, Congressman Frank Pallone, Jr., the chairman of the House Energy & Commerce Health Subcommittee, said he will have the panel do a thorough review of the dramatic increases to see if they are justified. The Asbury Park Press reported on Friday that some insurance companies have increased rates for long-term insurance as much as 35 percent.
Pallone is the author, along with the late Senator Edward Kennedy, of the Community Living Assistance Services and Support Act, known as the CLASS Act, that establishes a new long-term care insurance program that will focus on community-based care. The act, which was folded into the health reform plan, will be phased-in over four years starting this year.
"These increases are sudden and they are large," said Pallone. "I want to see the justification from the insurance companies. I also want to see how prevalent the increases are."
The Press report four insurance companies that increased rates by 25 to 35 percent. The paper cited a policy holder whose annual premium will increase from $1,960 to $2,800, another who has spent $29,000 on his policy since he originally purchased it but now faces an increase that will bring the annual cost to $5,208.
"The whole idea of insurance is to make care affordable," Pallone said, "And long-term care can be a costly burden for families with loved ones in need of nursing care. They shouldn't be forced into bankruptcy to provide that care."
There is a widespread misconception that Medicare covers long-term care, Pallone noted. The truth is, Medicare only covers limited nursing home stays and home services, he added.
Currently, there are 10 million Americans in need of long-term services, Pallone said. With an aging population, that number is expected to grow to nearly 15 million within 10 years, he added.
"The CLASS program will focus on services that allow people to remain at home rather than going into a nursing home," said Pallone. "The program is an important first step in addressing the need for long term care."