CA AB2604

Requires long-term care insurance policies to offer a lower-cost inflation protection option that automatically increases benefit levels by minimum 3% annually or 5% fixed annually, with exception for 1% annually for policyholders age 70+ meeting specified criteria.

Allows policyholders and certificate holders to reduce coverage and lower premiums when policies lapse or premiums increase, with options including reducing daily benefits, lifetime maximums, benefit duration, or eliminating inflation adjustments.

Requires insurers to offer specific reduction options when premiums increase, including reducing daily benefits by 25% or 50%, reducing benefit duration, increasing elimination periods, or converting to minimum coverage policies while maintaining partnership certification.

For policyholders age 70+ experiencing 50% or greater premium increases over policy lifetime, requires insurers to offer inflation protection option that automatically increases benefits by 1% annually.

Applies premium reduction requirements to all policies regardless of original issue date and requires written notice of reduction options at least 30 days before policy lapse.