U.S. federal research looks into increases in premiums for long-term care

Long Term Care InsuranceThe results of a federal government study have been released in a report that examined the impact of increasing premiums for insurance policies covering long-term care.

The report was created by the U.S. Government Accountability Office (GAO) and looked into the Federal Long-Term Care Insurance Program (FLTCIP), which is the country’s biggest private insurance program for long-term care.

Executive director Jesse Slome, of the American Association for Long-Term Care Insurance explained that since the FLTCIP is a voluntary plan with regular employees, the group is representative of long-term care insurance as a whole.

He added that with this study, “Instead of hyperbole, we now have facts to prove that the majority of consumers understand the value of their long-term care insurance protection,” and said that they neither reduce nor drop their coverage even when an increase in premiums occurs.

The Federal program had 146,415 enrollees in 2009, and at that time, there were about two thirds of the participants had been notified that they would experience a 25 percent increase in their premiums. At that time, all of the participants had also opted for a certain protection option for inflation, which was called the 5 percent automatic compound inflation option (ACIO).

Most enrollees with the FLTCIP who had the increase in their rates did not have any changes to their benefits. In particular, 67,511 participants, or 46 percent, kept their policies, choosing to pay the premium increases and opting for the 5 percent ACIO.

Among the participants, only 2,344 (1.6 percent) who would have had a premium increase allowed their coverage to lapse and left the program.

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