LA Times: CalPERS plans 85% rate hike for long-term-care insurance

More than 110,000 CalPERS policyholders are being warned about the hefty increase, which won’t take effect until 2015.

By Chad Terhune, Los Angeles TimesFebruary 21, 2013, 4:54 p.m. 

Dailey Mayo received some stunning news in the mail last week: an 85% rate increase for the long-term-care insurance he has had for 15 years from the California Public Employees’ Retirement System.

The retired sales manager in Pasadena said his monthly premium of nearly $400 would jump to $738, or about $8,850 annually, under this plan. “I’m 82 now and I might need this care soon,” he said. “It really ticks me off that they are doing this.”

More than 110,000 CalPERS policyholders are receiving similar news after the pension fund’s board approved the changes late last year. CalPERS said the hefty rate hikes won’t take effect until 2015 and are necessary to keep this $3.6-billion insurance fund intact for future claims. This CalPERS program, like other plans sold by private insurers, has been plagued by higher-than-expected claims, lower investment returns and poor pricing.

“We understand people’s anger and frustration,” said Bill Madison, a CalPERS spokesman. “It’s not something the board wanted to do, but it’s necessary so benefits are available to people when they need it. We know these rate increases can be a financial hardship.”

 

Continue reading here: http://lat.ms/13bb68B

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