Wednesday, July 30, 2014

Using Filial Support Laws as "Leverage"

What do you think about promotion of filial support laws -- laws potentially obligating adult children to care for and maintain or financially assist an indigent parent -- as grounds to encourage states to promote the purchase of "long-term care" insurance?  In essence, that is what three authors associated with the "American College of Financial Services" advocate in a recent article for volume 20 of  Widener Law Review.  Here's the SSRN abstract from "Leveraging Filial Support Laws Under State Partnership Programs for Long-Term Care Insurance."

"As thousands of the United States’ baby-boomers retire each day, people live longer, families disperse, and the population ages. Financing long-term care needs has become an increasingly important focal point in both civilian and government budget discussions. In order to reduce reliance on government provided long-term care funding programs such as Medicaid, states can leverage the often unenforced filial responsibility laws and State Long-Term Care Partnership Programs. Through the enforcement of existing filial responsibility laws, states can provide the proverbial “stick” to incentivize people to purchase long-term care insurance by increasing their personal liability for their family members’ long-term care expenditures. Furthermore, by offering liability protections from filial responsibility laws under the state’s long-term care insurance partnership program, states will be able to offer a “carrot” to encourage participation in the long-term care insurance market. Ultimately, by leveraging these two existing legal structures, states can incentivize the purchase of long-term care insurance and reduce reliance on government provided long-term care financing programs."
The authors advocate linkage between stronger enforcement of filial support laws and development of state long-term care insurance partnership programs. In the conclusion they write: "[t]he enforcement of existing filial support laws represents a unique opportunity for governments looking to enact long-term care funding changes.  Enforcement of filial laws represents the 'stick' to be applied to those without long-term care insurance."
 
The authors of this interesting article -- worthy of discussion -- self-identify on SSRN and in the footnotes of their article as faculty members at The American College.   As I was not familiar with that institution, I wanted to know more.  My additional research indicates that a more complete name is The American College of Financial Services (linked above), a nonprofit that offers "financial education for securities, banking and insurance professionals," including programs for trademarked designations such as "chartered life underwriter" and  "certified financial planner." 
 
For my part, having studied, written about, and (occasionally) litigated cases involving filial support laws for close to 20 years, I welcome this additional commentary.  I am concerned, however, that insurance companies may be tempted  to see filial support laws primarily as "marketing tools" for the sale of long-term care insurance, without fully appreciating the impact that enhanced enforcement of such laws could have on family dynamics, especially families of modest means.  

http://lawprofessors.typepad.com/elder_law/2014/07/using-filial-support-laws-as-leverage-reader-reaction.html

Federal Cases, Health Care/Long Term Care, State Statutes/Regulations | Permalink

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