HD35 - Changes Needed to Implement Private Insurance Coverage for Patients in Nursing Homes

  • Published: 1987
  • Author: State Corporation Commission
  • Enabling Authority: House Joint Resolution 87 (Regular Session, 1986)

Executive Summary:
The State Corporation Commission's (SCC) Bureau of Insurance and the Department of Medical Assistance Services (DMAS) were requested by the 1986 General Assembly in House Joint Resolution No. 87, introduced by Delegate Bernard S. Cohen, to review the need for and feasibility of enacting legislation that would encourage private insurance coverage for long-term care. This request was made because of the high cost of nursing home care, the large expenditures for nursing home care by the Commonwealth, and the projected continued increase in the elderly population of Virginia.

An advisory committee consisting of representatives of consumer groups, long-term care providers, insurers, and other interested parties was formed to assist the SCC and DMAS. The advisory committee has recommended the adoption of legislation that is similar to the newly adopted National Association of Insurance Commissioners (NAIC) Model Act. Section IX contains the advisory committee's recommendations.

The SCC and DMAS support legislation similar to the recommendation of the advisory committee. However, modifications are suggested to provide additional and, what is believed by the sec and DMAS, necessary protection for the consumer.

The advisory committee, the SCC, and DMAS also recommend investigation of areas related to the development of private long-term care insurance, as well as monitoring the initial effects of the proposed legislation, if enacted. The additional areas of concern include further study of tax incentives for insurers and consumers. The SCC and DMAS will report the need for any further legislation to the General Assembly, as appropriate.

All participants in the study support the development and circulation of a consumer guide for long-term care insurance, in addition to other types of educational aids to improve the awareness of the public about the need for protection for long-term care. One of the surveys conducted as part of the study confirmed the lack of awareness by Virginians of the cost of nursing home care and how it is paid. The average cost for nursing home care in Virginia varies from $15,000 to $26,000 per year.

This report also contains information about the activities of other states as they attempt to deal with the area of long-term care. National activity in this area is also included to provide a complete picture of the scope of the problem.

At the present time there is not a great deal of long-term care coverage available in either Virginia or the United States. The adoption of the legislation as proposed by the advisory committee, and modified to include SCC and DMAS recommendations, will be helpful in encouraging insurers to develop long-term care insurance products.