An Act Concerning The Connecticut Partnership For Long-term Care.
SB 1420 revises Connecticut’s long-term care partnership program and the rules governing long-term care insurance policies that qualify for state precertification. The bill directs the Office of Policy and Management to expand consumer outreach and education about long-term care needs, financing options, insurance availability, and Medicaid asset protection. It also requires annual reporting on incurred and paid losses for precertified policies, and a one-time report on whether consumers should be allowed to cancel policies and receive full premium refunds if insurers seek rate increases above inflation.
The bill tightens the standards for precertifying long-term care policies. Eligible policies must notify consumers about public education resources, offer home- and community-based services, include case management in home care plans, provide inflation protection, maintain records showing Medicaid resource protection, and avoid tying executive compensation to rate approvals. Policies may not require prior hospitalization or a prior nursing home stay before benefits begin. The Insurance Commissioner is also authorized to adopt regulations to implement these requirements.
SB 1420 also strengthens rate regulation for both individual and group long-term care policies. It preserves minimum loss-ratio standards, requires annual actuarial reporting, and limits rate increases for precertified policies to no more than what was allowed when the policy was originally precertified. For large premium increases of 20 percent or more, insurers must spread the increase over at least three years, cannot file another increase during that period, and must give policyholders notice and options to reduce benefits or move to a minimum affordable benefit package.
The bill’s impact on state law is to impose more detailed consumer-protection, disclosure, reporting, and rate-stability requirements on insurers participating in the Connecticut Partnership for Long-Term Care. It affects the Office of Policy and Management, the Insurance Department, long-term care insurers, policyholders, and certificate holders, while also reinforcing the connection between private long-term care coverage and Medicaid asset/resource protection rules.
The overall sentiment appears generally favorable in committee, as reflected by the 18-4 joint favorable vote. At the same time, the failed 5-15 change-of-reference motion suggests some members wanted the bill handled differently or had reservations about the committee assignment or scope. The main points of contention likely center on the bill’s tighter rate restrictions, limits on insurer pricing flexibility, added reporting burdens, and the proposed consumer refund/cancellation concept when rate increases exceed inflation.
The bill amends sections 17a-861, 38a-475, 38a-501(b), and 38a-528(b) of the Connecticut General Statutes, effective July 1, 2025. It expands state oversight of long-term care insurance by adding consumer education duties, annual loss reporting, precertification standards, and stricter rate-approval rules. It also requires insurers to provide policyholder notice and benefit-reduction options before substantial premium increases, and it authorizes further regulatory action by the Insurance Commissioner.
Committee action indicates broad but not unanimous support. The 18-4 joint favorable vote suggests the bill was viewed positively overall, likely because it enhances consumer protections and transparency in long-term care insurance. However, the failed change-of-reference motion and the presence of dissenting votes show that some members had concerns about the bill’s structure, regulatory burden, or effects on the insurance market.
The most notable disagreements appear to involve how far the state should go in constraining long-term care premium increases and insurer practices. Insurers may object to the limits on rate hikes, the requirement to spread large increases over three years, the disclosure of reinsurance details, and the prohibition on tying executive compensation to rate approvals. Some lawmakers may also have concerns about the feasibility and market effects of the report studying full refunds when rate increases exceed inflation, as well as whether the bill could reduce insurer participation in the partnership program.