New York State's Department of Insurance is recommending the state undertake a fresh campaign to encourage consumers to buy long term care insurance.
In a report to Governor David A. Paterson and the state legislature, Superintendent of Insurance James J. Wrynn said his department should join with the state's Department of Health and its Office for the Aging to inform New York consumers of the limitations of health insurance and governmental programs in providing long term care services.
"An intense, concerted, long range consumer education campaign is essential to effectuating a culture change with respect to the private financing of long term care services," according to the report.
The effort should also emphasize the favorable federal and state tax treatment of premiums and benefit payments for long term care insurance and the advantages of purchasing an LTC policy certified under the New York State Partnership program, according to the report.
In addition, New York should increase its efforts to educate the public that its tax credit covering 20% of LTC premiums paid provides a significant benefit to residents, the report said.
The report also called on the federal government to allow an above-the-line deduction or tax credit for LTC premiums and to allow LTC insurance to qualify as part of a cafeteria-style employee benefits plan under Section 125 of the Internal Revenue Code. This would allow before-tax deduction for premiums.
The report also states that LTC insurance carriers "should be encouraged to emphasize the marketing and sale of basic long term care type coverage that would be affordable for more middle-class New Yorkers. Such basic type coverages are permissible under current New York State Insurance Department regulations, but are not heavily marketed by long term care insurers."
According to the report, 32 LTC carriers reported 321,000 non-partnership in policies in force as of the end of 2008, along with almost 64,000 partnership polices.
Currently, 18 carriers are selling LTC insurance in the state, according to the report.
