WASHINGTON – U.S. Rep. Joe Barton, R-Texas, ranking member of the House Energy and Commerce Committee, released the following written statement as part of an Oversight and Investigations Subcommittee hearing entitled, “Long-Term Care Insurance: Are Consumers Protected for the Long Term?”:
“Chairman Stupak and Ranking Member Shimkus, thank you for convening this oversight hearing. I think long-term health care is arguably the most important health care issue that is seldom mentioned. It has huge potential and is something which we have been trying to encourage for a number of years. It is obviously something that needs to be looked at closely. I want to thank you, Chairman Stupak, for making sure we have a comprehensive set of witnesses, a very balanced number of panels. I want to thank in advance our commissioners, the various states that are here. I think your testimony will be very illuminating.
“This is a big issue, a big problem. It’s an essential financial tool for people to plan for what can be the crushing cost of assisted daily living in late life. We’re told there are 7 million Americans who have a long-term health policy and we hope that number will increase. By 2020, 12 million Americans over the age of 65 are expected to need long-term care.
“It’s obvious that as our population ages, more and more people are going to need long-term health care. The question is, how will we pay for that care? I think that everyone knows today that Medicaid, which is supposed to be for lower-income medical assistance, that two-thirds of the Medicaid budget in those states goes to paying for care for our aging senior citizens in nursing homes. That’s not what Medicaid was intended for. Think what we could do if we could come up with a comprehensive long-term health care policy for America that all Americans over 65 would actually use, how much money that would free up for Medicaid.
“If we’re going to have a long-term health care system that’s based on private insurance, we have to have trust in that system. Keeping your word is essential in everybody’s lives. Insurance isn’t government welfare, like the Medicaid program is. Insurance is a binding, legally enforceable contract for service between two parties. One party buys the service, and the other delivers the service. If we’re going to encourage to get long-term health care insurance, they must be able to trust that at a date somewhere in the distant future, if they need that service, if they need that coverage, the insurer will make good on the contract’s promise. Anything else is a scam. This distinguishes these policies from government sources of long-term health care financing, namely Medicaid, which can change at the discretion of Congress or the states and as we all know, frequently does.
“People must be able to count on their long-term health care insurance, yet we’ve read story after story, and will hear testimony today, that sometimes insurers fail their customers. Some firms low-ball their initial policy premiums in order to sell them, and then raise the rates so steeply that policyholders lose their coverage – they simply can’t afford to pay for it. Or the insurer routinely uses pre-fabricated objections, fine print and intentionally convoluted policy provisions to deny the care that the people thought they were buying when they began to pay for their long-term health care policy years ago. Some people have complained about these problems and gotten help, but many more people have simply been wronged and don’t know what to do about it.
“We should shine some light on these bad practices and identify what consumers need to know. If Congress is going to encourage growth of this market, we should make sure that long-term health care insurance really works like we intend it to and the people who buy it know that they’re going to get it when they need it. Bad practices – even if they’re rare – instill the kind of suspicion that convinces those who will need care most to avoid getting insured. Nobody wants to be the person who is swindled by a long-term health care policy.
“Insurers should be held accountable for their actions. We can rely on competition and the marketplace to make good companies with good practices the ultimate winners, but it’s also our job in government to protect the interests of the consumers. This is principally and properly done through state regulation. Yet, I’m told today the GAO will report today about the uneven regulatory oversight provided by the states. This is something we need to work on and cooperate with the states on to make sure this gets better.
“We should also identify what Congress can or should be doing to propel more uniform consumer protection standards. Congress has already been encouraging long-term health care insurance for a number of years, most recently through certain provisions of the Deficit Reduction Act that was passed several years ago when I was chairman of this committee.
“Finally, beware unintended consequences. The complexities of long-term care insurance invite unintended consequences through the sort of over-regulation that reduces flexibility, innovation and consumer choice. We don’t need to solve an old problem by creating new ones.
“With that, thank you, Mr. Chairman and Ranking Member Shimkus. This is an important hearing and I’m appreciative that you’re doing it.”
