Insurance commissioners in nearly every state are alarmed as they have nearly no authority to stop these skyrocketing rates.
Across the country, state authorities are finding that the price of long term care insurance coverage is heading sky high at an increasingly rapid rate, and at the moment, they don’t have much in terms of power when it comes to actually controlling this issue.
Regardless of claim history or health status, insurance premiums are rising at a staggering pace.
It is not unheard of – or even uncommon – for long term care insurance policyholders to receive a letter that tells them that when they renew their coverage for the next year, they will face increases in premiums that will be higher than 50 percent. This, regardless of claims history, health status, or even age. In fact, one letter among those being issued in Kansas added the rather interesting point that “Please note that a larger increase was justified and could have been requested,” despite the fact that a 53 percent increase was being implemented.
These massive increases in long term care insurance are being applied to everyone, not just certain individuals.
In the case of the aforementioned letter, the insurance company assured the customer that the change applied to everyone in Kansas who was covered through them. It doesn’t have to do with anything that an individual could have specifically done or any changes in his or her health or age status.
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This type of increase would mean that LTC insurance premiums would go from an already considerable price such as $3,200 – which was a typical price being paid by consumers for this type of coverage – to a bill that is much closer to $5,000 per year.
The office of the Kansas insurance commissioner has stated that this is not even close to being the highest increase that has been applied within this sector of the insurance industry. In fact, one insurer just received authorization to increase their own rates by 80 percent.
The reason that long term care insurance companies are raising rates so dramatically isn’t because of greed or a desire to spike their profits. In many cases it is, in fact, quite justified, as these insurers have not been taking in nearly enough money in premiums to be able to pay for the claims that they are receiving.