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Some excerpts from a Kaiser Health News article, appearing today on TIME/Money website:
New Yorkers who bought long-term care insurance from Genworth, one of the few remaining carriers, were hit with a 60% premium increase in October. The same company has asked Pennsylvania state regulators for permission to raise premiums by as much as 130% for some policyholders.
In California, an estimated 133,000 residents who bought long-term care policies from CALPERS, the state workers’ retirement plan, have seen their premiums rise by 85% over two years. A 2013 lawsuit retirees filed against CALPERS was granted class-action status in February…
Genworth has lost $2 billion on its long-term care policies overall and continues to lose between $100 and $150 million each year, [Genworth’s CEO, Tom McInerney] said in an interview…
About 85% of the company’s long-term care policyholders who’ve received premium hikes have decided to pay them, while another 9% chose to cut their benefits to keep their premiums the same. About 6% opted to drop their policies, although Genworth will pay claims up to the amount of premiums already paid, so consumers won’t lose everything they’ve paid, McInerney said…
…In the meantime, McInerney and other long-term care insurance leaders are trying to change the way consumers see their private sector product: as catastrophic insurance with more limited benefits and consistently rising premiums, rather than as a way to pay for all of their long-term care. It’s a hard sell.
“No one likes premium increases, but they do understand, in the end, why they’re needed,” McInerney said. “We certainly can’t lose billions of dollars and have consumers expect us to pay claims.”
Given the big premium increases, I’m actually surprised they say 85% are paying the premium hikes and that only 6% have dropped the policies.
Why Long-term Care Insurance Is Becoming a Tougher Call
New Yorkers who bought long-term care insurance from Genworth, one of the few remaining carriers, were hit with a 60% premium increase in October. The same company has asked Pennsylvania state regulators for permission to raise premiums by as much as 130% for some policyholders.
In California, an estimated 133,000 residents who bought long-term care policies from CALPERS, the state workers’ retirement plan, have seen their premiums rise by 85% over two years. A 2013 lawsuit retirees filed against CALPERS was granted class-action status in February…
Genworth has lost $2 billion on its long-term care policies overall and continues to lose between $100 and $150 million each year, [Genworth’s CEO, Tom McInerney] said in an interview…
About 85% of the company’s long-term care policyholders who’ve received premium hikes have decided to pay them, while another 9% chose to cut their benefits to keep their premiums the same. About 6% opted to drop their policies, although Genworth will pay claims up to the amount of premiums already paid, so consumers won’t lose everything they’ve paid, McInerney said…
…In the meantime, McInerney and other long-term care insurance leaders are trying to change the way consumers see their private sector product: as catastrophic insurance with more limited benefits and consistently rising premiums, rather than as a way to pay for all of their long-term care. It’s a hard sell.
“No one likes premium increases, but they do understand, in the end, why they’re needed,” McInerney said. “We certainly can’t lose billions of dollars and have consumers expect us to pay claims.”
Given the big premium increases, I’m actually surprised they say 85% are paying the premium hikes and that only 6% have dropped the policies.
Why Long-term Care Insurance Is Becoming a Tougher Call
