Long term care partnership policies allow the policyholder to preserve personal assets equal to the amount of insurance benefits paid from the policy, should the policyholder use all other personal assets, and become eligible for Pennsylvania's Medical Assistance Long Term Care Program. Federal law requires long term care partnership policies to include inflation protection.
Currently, Pennsylvanians buying long term care partnership policies must have inflation protection increasing the coverage under the policy annually at a rate equal to the Consumer Price Index (CPI) or at a fixed rate of not less than 3 percent. The new standard will reduce the fixed rate to not less than 1 percent. Pennsylvania law still requires insurers to offer 5 percent compound annual inflation protection on all long term care policies.
Insurers will be able to offer this new inflation option for both new and existing partnership policies. The guidance will take effect when published in the Pennsylvania Bulletin September 16.
MEDIA CONTACT: Ron Ruman, Insurance Department, - 717-787-3289
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/pennsylvania-insurance-commissioner-announces-greater-flexibility-in-long-term-care-partnership-policy-inflation-requirements-to-hold-down-premium-increases-300328770.html
SOURCE Pennsylvania Insurance Department