The Minnesota Department of Commerce is wrestling with ideas about how to respond to increases in long-term care insurance (LTCI) premiums.
The department recently brought consumers, regulators, actuaries, consumer advocates and industry representatives to St. Paul, Minn., for a hearing on LTCI issues. The department posted an audio recording of the hearing and many written versions of the presentations on its website.
Vincent Bodnar, an actuary with the Society of Actuaries Long-Term Care Insurance Section, testified that LTCI issuers’ costs are much higher than expected because consumers are keeping their policies at a higher rate than predicted, consumers are living longer than expected, and the interest rates the issuers get on their own investments are only about half of what was originally expected when many of the hardest-hit policies were affected, back in the 1990s.
Deb Newman, a longtime Minnesota LTCI broker, told regulators most of her clients understand the need for the increases once she explains the reasons.
“Over 99 percent of the policyholders have kept the policies, even with the increases,” Newman said. She said that having a private LTCI option is important, and that regulators have to provide the flexibility to help keep the issuers viable.
She brought in LTCI policyholders and claimants to talk about how their coverage had helped them.
Other consumers and consumer advocates who commented attacked the idea of making it any easier for issuers to pass their higher costs on to policyholders.