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Long-Term Care

Thursday, October 04, 2012

CalPERS Weighs 75% Premium Increase for Long-Term Care

CalPERS is considering a 75% premium increase for most of its 150,000 long-term care beneficiaries, the Sacramento Bee reports.

The increase would take effect in July 2015.

Background

Unlike its pension benefits program, CalPERS' long-term care program is not funded by taxpayers and must pay its own claims. According to CalPERS officials, the long-term care program has enough money for now but will face budget shortfalls in decades to come.

Ann Boynton, CalPERS' deputy executive officer, said, "At current course and speed, we would not have enough money ... to pay anticipated claims" in the long-term care program.

Details of Possible Premium Increase

The 75% rate hike being considered by CalPERS would be its largest to date, possibly requiring some beneficiaries to pay hundreds or thousands of dollars more annually. Officials are considering phasing in the hike over three to five years.

Officials also are looking into offering a cheaper, less-comprehensive policy as an alternative. The alternate plan would cap benefits at 10 years without inflation protection. Officials say that the less-comprehensive plan would be popular because most people do not need more than a few years of long-term care services.

Boynton said that CalPERS wants to provide beneficiaries with "a comfort level with a somewhat lesser benefit than they're purchasing now, but that's adequate," adding, "We do think that they will be very receptive to it."

Timeline

CalPERS' pension and health benefits committee will review the proposal for the rate hike on Oct. 16, and the CalPERS board of administration is expected to make its final decision on the proposal on Oct. 17 (Kasler, Sacramento Bee, 10/4).

Reader Comments:
  • 7
  • 10/26/2012
  • Rosemary England

I agree with others who have made comments about a class action suit. There's a saying, "There's a time for talkin and a time for doin". If anyone is interested in starting a "class action suit", please post your comments. This is the time to formulate our plans. Everyone, who's interested must put forth some effort & not wait for someone else to do all the work to save their investment. This is not my field of expertise, however, I have some legal experience and I'm certainly willing to put in the time & effort required, as long as I'm not the only person carrying the ball. If we get enough people interested in taking a stand, I will be happy to get this going and find a way to exchange e-mail addresses. Remember, everyone has to come together as a whole or we have nothing. Does anyone even know if a class action suit is feasible? Please post your comments. It's not my intent to appear synical, but my reasons for some of my comments are from past issues I've taken on.

  • 6
  • 10/13/2012
  • Barbara Hanson

People w/ serious medical conditions should hang on to their current CalPERS policies for sure. They may not be eligible now for a new policy that must be underwritten for health.
Normal insurance companies have state mandated limitations on rate hikes and the state guaranty association to back them up. Consider alternative coverage with a broker/agent who has access to several LTCi carriers, but do not drop CalPERS LTC until you are safely insured elsewhere. Your health could change, and you buy private LTCi w/ your relatively good health. It may work to do a combo policy or smaller LTCi policy in cconjunction w/ the CalPERS' downsize offer.
Buying this coverage was a great idea. Don't drop it in anger - shop carefully. You bought it to protect assets, choices and your family. That reason is still there.

  • 5
  • 10/10/2012
  • robert phillips

This is unfair and fraudulent. I've paid over $25,000 to ensure my wife and I were not a burden on our children and continued to maintain coverage with the 5% annual increases but we can't maintain at 75% and will lose coverage. We tried to be prudent and prepared. What action can we take?

  • 4
  • 10/09/2012
  • Rosemary England

I'm another person who has paid my premiums for years. I'm a retiree with Calpers & not eligble for premium-free medicare. Tho' the long-term care premiums have doubled over the years, I've continued to make that sacrifice with my monthly deductions. I tried to the best of my ability to prepare for my retirement years only to find,like so many others, I will have to drop my policy. There's simply no justice for those of us who do prepare. It's hard to understand how there are no insurance laws to protect people like ourselves. I truly believed that I was doing the right thing by preparing for my future and not being a burden to family or state. It just sickens me to think about it. I'm very sorry for those who are in the same boat as me. Of course, now that I will be turning 65 soon, this would be the time I would likely reap any benefits.

  • 3
  • 10/09/2012
  • Hatti Hamlin

If a private company were to announce a 75% increase in premiums the state would launch an investigation! This is ridiculous and unfair to those who have paid in for years. But this is what you get when you design a program primarily from political objectives, not from a business perspective.



Readers are invited to send feedback to: chl@chcf.org

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