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Committee advances bill to modernize Indiana long-term care partnership rules to reduce premiums and expand product participation
Summary
House Bill 1595 would update the state’s Long-Term Care Partnership program to align with federal Deficit Reduction Act options, lower required inflation protection and reduce design burdens that insurers say discourage participation. Committee passed the bill unanimously.
The Health and Provider Services Committee advanced House Bill 1595, a measure intended to modernize Indiana’s Long-Term Care Partnership program so that more affordable long-term care insurance options are available to Hoosiers.
Representative Carball introduced the bill and described it as an effort to update an out-of-date Partnership design and to adopt elements of the federal Deficit Reduction Act (DRA) approach. "We' re making another run at it ... so we can adopt some of those DRA changes into our program," Representative Carball said, explaining that design requirements that once made the program attractive have driven premiums up and discouraged insurer participation.
Why it matters: The Partnership program provides a potential asset disregard on Medicaid spend-down if a policyholder exhausts long-term care benefits. Sponsors said that current design rules (including a common 5% compound inflation protection requirement) have pushed premiums to unaffordable levels and that adopting alternate inflation-protection choices or design limits could lower first-year premiums substantially.
Testimony and details
- Industry and advisor testimony: Chris Barthouse, representing the National Association of Insurance and Financial Advisors (NAIFA)–Indiana, testified the program worked well for about 20 years but has become unaffordable and that only two carriers currently participate. He urged changes that reduce special design and reporting burdens so more companies will offer partnership policies.
- Premium impacts and inflation-protection choices: Witnesses said a 5% compounding inflation-protection rider can triple premiums; reducing required compounding would sharply lower annual premiums and expand market participation. Industry testimony said states that allow lower mandatory inflation levels have seen more sales.
- Protections for existing policyholders: Sponsors repeatedly said they do not intend to reduce promises already made to current partnership policyholders; the bill is aimed at creating affordable options going forward without jeopardizing standing contracts.
Vote and next steps
The committee recorded a unanimous vote for passage (12–0) and moved the bill forward. Sponsors said they will continue conversations with state agencies to coordinate the application to the Centers for Medicare & Medicaid Services (CMS) to update the state plan and partnership recognition.
Speakers recorded during the item included Representative Carball (author) and Chris Barthouse (NAIFA-Indiana).
