My Testimony in Sacramento

Long Term Care InsuranceAs mentioned in my prior blog, on April 7th  I was able to attend a Joint Informational Hearing in the Capitol in Sacramento on long term care services and supports. The hearing consisted of three committees of the California Legislature. Here is my outline:


By Louis H. Brownstone

Chairman, California Long Term Care Insurance Services, Inc.


  1. Insuranceis the best alternative to mitigate the tsunami that will hitour State finances.
  2. Don’t give up on the long term care insurance industry. Don’t assume it’s static.
  3. The industry is in transition, and can become a viable solution for the middle class.
  4. Its viability would provide an excellent partial solution for California’s long term care services and supports.
  5. Many factors currently inhibit the industry’s viability in California.
  6. We understand the problems…let’s solve them.


  1. Most of the policies sold in the future will not cover the catastrophic risk.
  2. The middle market must be penetrated. “Something is better than nothing.” Affordability is crucial. Simple is good. We will see:
  • Fewer riders and only basic protection, resulting in lower premiums.
  • Policies designed to solve more than one need…linked products offering long term care protection in addition to other benefits.
  • Traditional long term care products containing structures similar to life insurance policies, requiring completely changed regulations.
  • The worksite market could explode in future years. Younger buyers would pay lower premiums, expanding the market.


  1. Long term care regulation is excessive and outdated. Policies are no longer being sold to frail, vulnerable women in their seventies, but to alert people in their mid-fifties with the ability to think. Lighten up regulation of long term care insurance and tighten up regulation of linked products with long term care riders. Consistency is needed.
  2. Be accepting to new ideas in product design. Change the law if needed to allow a good new idea to enter the marketplace.
  3. The two to three year time period it takes the Department of Insurance to approve a new filing is unacceptable. The latest products with good solutions are mostly not yet available in California. Approvals need to be timely. Our citizens deserve the same choices available in other states.
  4. Update the codes to make our laws more compatible with those in other states while at the same time maintaining our unique consumer protections. This will speed the filing process and avoid legal wrangling over terminology.
  5. Severely reduce the list of exempt assets enabling rich people to shift and shield their assets in order to qualify for Medi-Cal. We cannot afford this kind of gaming the system.
  6. Make major revisions in agent education. Emphasize new product designs and what they accomplish and deemphasize Medi-Cal spend down regulations which only come into play near the end of a long term care insurance claim.
  7. The California Partnership for Long Term Care is on life support, swallowed up in the bowels of the Department of Health Services. Its sales are down 96% from its peak. It must be reinvigorated through the following:
  • Elevate its status within DHS, or if DHS will not support it, put it under the Department of Insurance or under a special caregiving administrator.
  • The Partnership needs to be recognized as a future producer of revenue for the State, not as an expense.
  • Speed the approval of filings of new Partnership policies with increased marketability.
  • Give the Partnership some funds to educate the public. This is vital.


  1. Increase the penetration of the target audience owning long term care insurance from 7% to 20%.
  2. The savings in twenty years is about $3,000,000,000, per year.
  3. How are we going to die? You can you make the end of life better for millions of Californians.

You can find the complete recording of my testimony on under Media and Media Archive.