Posted by (American Life Insurance Guide 05/04/2023 News)The California Insurance Agency has entered into the actuarial audit stage for the proposal to establish the "California Resident Long-Term Care Insurance", and the actuarial report will be formally submitted to the state legislature no later than January 2024, 1.
The report proposes the establishment of a state-run long-term care insurance program that would be taxed directly from the wages of California residents to pay for this insurance.
Bill Progress Timeline (2022.10-2024.01)
The California Department of Insurance submitted to the state government in 2022Feasibility report*, and provides a sample schedule.In the report's timeline, January 2025, 1 is assumed to be the effective date for state-operated long-term care insurance.
Lessons Learned: Washington State Long-Term Care Act
In a series of reports on the American Life Insurance Guide Network, it was pointed out that,Washington state is the first state in the nation to introduce long-term care taxes directly into wages.The law will come into force on July 2023, 7.
Because it is generally believed that the insurance product solutions provided by the Washington state government are inferior to those of commercial life insurance companies, a large number of Washington state residents rushed to purchase commercial insurance before the deadline to apply for exemption from this tax.
According to data from the Washington State Employment Security Department in mid-June, the total number of employed people in Washington state was 6, of which 3,800,000 Washington state residents had made surprise insurance,Surprise enrollments accounted for 13 percent of the overall workforce.
The major life insurance companies in the United States were overwhelmed by this sudden wave of insurance purchases and had to announce successivelySuspension of Washington State operations.
Whether the implementation of the Washington State Long-Term Care Pension Act was a success or a failure is still unknown.But for the legislatures and residents of other states in the United States, it provides important reference value.
(>>>Related reading:Washington State promotes universal long-term care insurance (LTC), is it a benefit or a disguised tax increase on the middle class?)
(>>>Related reading:The number of long-term care insurance in Washington has surged, and many insurance companies have suspended applications in Washington）
Industry Viewpoint
The US Life Insurance Guide Network believes that the Cal Insurance Bureau will not submit the final actuarial report to the legislature too early.
The way of collecting premiums is most likely to learn from Washington State, which is directly deducted from wages.
Our concern is that, given Washington State's surprise insurance policy and majorInsurance companyThe California government may adopt a "retroactive one-size-fits-all" attitude. For example, it will be signed in 2025, but it is stipulated that only private insurance before January 2024 can be exempted from this tax.
BH Financial Insurance Consultant Heather Xiong CFP®️It is believed that tax collection to fill the funding gap is the government's top priority, and providing benefits is second. We are not yet clear about the performance and indicators of this pension insurance operated by the California government. ", not the feature of "efficiency", I don't think the insurance benefits will be better than the products of commercial insurance companies.People who have their own needs and requirements for elderly care planning can take active actions to choose a more flexible and comprehensive way to provide care costs in advance.
Top commercial long-term care insurance product ranking
Chistopher Yen, a partner of Simplicity Life, said in an interview, "More people are insured is definitely not a bad thing, but from an operational point of view, there are only 780 million people in Washington state, and the surprise insurance coverage during the preparation of the bill suddenly paralyzed American life insurance companies. Up to 4 months. The population of California is 5 times that of Washington State, which may cause a resource squeeze and large-scale stagnation in the life insurance industry. Customers who pay attention to this category may need to buy in advance.”
American Life Insurance GuideWill follow up on the report further. (full text)
*"Long Term Care Insurance Task Force",CDI, https://www.insurance.ca.gov/0500-about-us/03-appointments/ltcitf.cfm
(>>>Related reading:Long Term Care long-term care insurance in the United States introduces the price advantages and disadvantages of the claims must read and purchase age window ）
(>>>Recommended reading:Popular science stickers｜The cost of long-term care in the United States )
(Update Mar 20230831, XNUMX)
