Long-Term Care Insurance: Actions Needed to Reduce Risks to Consumers

GAO discussed its recent studies of long-term care insurance. GAO noted that: (1) many consumers are vulnerable to considerable risks in purchasing long-term care insurance because states have not adopted optional standards drafted by a national insurance industry association; (2) insurance companies have adopted the standards more quickly than states, but most policies reviewed did not meet the standards, particularly regarding disclosure and inflation; (3) the standards do not sufficiently address such features of long-term care insurance as policy terminology, definitions, and eligibility criteria; (4) consumers face considerable financial risks from insurance companies' periodic adjustments of prices, which can result in price increases that make it difficult for consumers to retain their policies; (5) without certain standards, consumers are limited in their policy upgrade options; and (6) insurance companies do little to prevent the sale of long-term care insurance to consumers that can not afford it.