SacBee: CalPERS sets new long-term care rates, plans open enrollment

A key CalPERS committee today approved a plan to reopen its long-term care insurance to new policyholders, widen the eligibility pool and introduce a new, cheaper benefit program.

Today’s news — “CalPERS enrollees receive notice of long-term care rate hikes” — underscored CalPERS’ decade-long effort to right a struggling program that pays for things like nursing care and in-homehealth services. Unlike public pensions, the long-term care benefits are a private insurance plan. Claims are paid solely with earnings from policyholders’ premium investments. Taxpayers money doesn’t backstop shortfalls.

CalPERS program has struggled for many years, falling victim to loose underwriting standards, a high number of claims and poor investment returns. Many private insurers have fell victim to similar trends, but had a larger pool of policyholders to share the risk. CalPERS has struggled more acutely in part because because it restricted its policies to members. About 150,000 of them hold policies.

The fund stopped taking new long-term care insurance applicants in 2009 to stem losses that threatened the program’s viability. But officials today said that premium increases, an expected migration to the new, cheaper policy and other factors are strong enough medicine for the ailing program that it can again take applications at the end of this year.

The strategy includes tougher underwriting standards and opening the program to adult children of CalPERS members, assuming that the Legislature changes state law to allow it. Applicants could enroll any time, not just during a specified time of the year.

Read more here:


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  • LAAAC is managed by St. Barnabas Senior Services; Funded, in part, by Archstone Foundation.
  • St. Barnabas Senior Services

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