Summary: Although National Association of Insurance Commissioners (NAIC) standards have expanded, consumers are still vulnerable to considerable risks in buying long-term care insurance. Consumers are at risk for two main reasons. First, many states have not adopted key NAIC standards. Second, the NAIC standards themselves do not sufficiently address several features of long-term care insurance with important implications for consumers. For example, policy language on matters like eligibility criteria is often vague and inconsistent across policies, making it hard to compare policies and judge which provisions can reduce the likelihood that a policyholder will receive benefits. Consumers also face considerable financial risks, such as price hikes that could make it difficult for them to retain their policies. In addition to problems with insurance policies and standards, GAO's work at eight insurance companies revealed that, except for Medicaid recipients, the companies do little to prevent the sale of long-term care insurance to people who cannot afford it.
