Insurance Changes for Elderly Assailed

SACRAMENTO —  Insurance Commissioner Chuck Quackenbush came under attack Wednesday by two consumer groups that want to overturn his decision allowing insurance companies to trim benefits for the elderly who buy private coverage for nursing home care and other health services.

In a Los Angeles County Superior Court lawsuit, the groups challenged an order Quackenbush issued late last year in which he invoked a little-known provision in a new federal health care law permitting insurance carriers to issue long-term care policies with lower benefit levels than allowed by California law.

“Commissioner Quackenbush has overstepped his authority on behalf of an insurance industry intent on taking an unlawful shortcut to limit insurance benefits paid to disabled consumers,” said Ed Howard, executive director of the Center for Law in the Public Interest, which filed the suit on behalf of the Congress of California Seniors and Consumers for Quality Care.

Quackenbush, who contends that he is acting within his authority, said he issued the directive so that California insurance companies and consumers can take advantage of tax breaks in the new federal health care law.

“I think we’re just giving consumers choices,” Quackenbush said. “In the absence of legislative action, what we have done is exercise our emergency powers” spelled out in state law.

The federal health care reform measure, which became law in August, attempted to encourage sales of long-term care policies by providing tax breaks for buyers and sellers.

But in California it created a conflict because state law requires companies to offer a greater menu of benefits to policyholders than those offered in policies that qualify for the tax exemption.

Without directly criticizing Quackenbush’s order, 14 House Democrats from California, including Los Angeles Reps. Henry A. Waxman, Howard Berman and Maxine Waters, on Wednesday asked the Clinton administration to ensure that policies issued under California’s law also qualify for tax breaks.

Citing the needs of their elderly constituents, the House members told President Clinton: “Unless the Treasury Department acts soon, these seniors will have a much more difficult time receiving long-term care benefits due to a disparity between federal and state law.”

Over the past decade, elderly Californians who don’t want to be a burden to their children and grandchildren have been increasingly purchasing the benefit packages. The policies provide home health services or nursing care for people who become disabled. Most of the purchasers have been retirees ages 68 to 72.

Lois Wellington of Burbank, president of the Congress of California Seniors and a plaintiff in the suit, said her great concern is that the elderly will purchase the new types of policies under the mistaken belief that they provide broad coverage.

“Unfortunately, they don’t all understand nor do they all read carefully and they can be misled and buy something that is totally unsuitable or does not deliver the benefits that are perhaps alluded to but not given as part of the policy,” Wellington said.

She said that under the long-term care policies allowed by Quackenbush, seniors who cannot walk and eat without supervision would not be eligible for benefits.

Jamie Court, director of Consumers for Quality Care, accused Quackenbush of bowing to the interests of insurance carriers.

“Quackenbush must not be allowed to shortchange disabled consumers on behalf of insurance companies who have contributed hundreds of thousands of dollars to his campaign committees,” he said.

Quackenbush dismissed the criticism, saying “that’s a common charge that is leveled at every policymaker, every legislator in the state.”