Advocates Ask for New Rules Regarding LTCI Rate Increases

Advocates Ask for New Rules Regarding LTCI Rate Increases

Bonnie Burns, our Training and Policy Specialist, and another advocate Amy Bach of United Policyholders have asked regulators to create new conversion rights for any long-term care insurance policyholder who has held a policy 10 years or more.

They both believe that if a person who has owned a long-term care insurance (LTCI) policy for 10 or more years is notified of a rate increase, s/he should  be able to convert to a paid-up policy with benefits equal to the amount of premiums already paid. Burns and Bach sent this proposal in a letter to the Senior Issues Task Force at the National Association of Insurance Commissioners (NAIC). They were commenting on a draft of LTCI rate increase model revisions that the task force is reviewing.

If you know people who are experiencing high rate increases, please let us know how they are affected. We know these rate increases can cause much financial and emotional stress for consumers, yet there is little data on this affect, and it’s an important piece for our regulatory discussions. The main data looked at is lapse rates on these policies. But because the lapse rates are so low, less than 1%, it is challenging to argue that these increased rates are unaffordable since so few people appear to drop their policies. Therefore, if you know how the impact of these rate increases is affecting your clients or loved ones, please share their stories with us. Some people reduce their benefits or make financial cuts in other areas they can’t really afford to be cutting back on.

Some sample questions include:

  • If you kept your LTC insurance policy after the rate increase and pay the higher premiums, are you cutting costs elsewhere?
  • How is your life being affected to offset this higher cost?

Please share your stories with Bonnie Burns at bburns (at) cahealthadvocates.org.

For more information, see the article, “Groups call for tough LTCI rate rules.”

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.