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Life Health > Long-Term Care Planning

Montana Regulator Joins Long-Term Care Insurance Rate Hike Clash

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What You Need to Know

  • Senior Health Insurance of Pennsylvania has been offering policyholders a premium increase options package.
  • Some state regulators say they would rather see SHIP go through liquidation and have state guaranty funds pay the benefits.
  • The regulators in Pennsylvania who developed the current approach say the states with the most affected policyholders seem to support it.

Montana hopes to stop a failed long-term care insurance issuer — Senior Health Insurance of Pennsylvania — from moving ahead with a premium increase effort.

Troy Downing, Montana’s commissioner of securities insurance, said he is trying to work with insurance regulators in 27 other states to go to court to block implementation of a rate increase package.

For advisors with retirement planning and long-term care planning clients, the announcement means that, in many states, the size of some clients’ LTCI premiums may be up in the air.


SHIP has been ailing for years. In 2021, a Pennsylvania judge approved a rehabilitation plan that was developed by Pennsylvania regulators.

Part of the rehabilitation plan calls for policyholders to choose between LTCI premium increases, benefits changes, or a combination of premium increases and benefits changes.

Downing told Montana residents in an announcement posted on his website that he and regulators in 27 other states are going to court in an effort to block the rehabilitation effort and force SHIP into liquidation, so that guaranty associations will be responsible for paying the benefits.

In most states, the life and health guaranty associations that back long-term care insurance benefits handle liquidations by sending assessment bills to their member insurers.


About 140 SHIP policyholders live in Montana.

Their average age is 88, they have been paying SHIP premiums for an average of 25 years, and they face possible premium increases of up to nearly 600%, with an average increase of 70%, Downing said.

Downing said Montana gives him the authority to approve the SHIP long-term care insurance rate increase requests.

“These unapproved rate increases could force senior citizens to choose between the long-term care they rely on or their financial security,” Downing said in a comment included in the announcement. “In complete disregard for Montana law, SHIP placed their financial burdens on the backs of their customers by giving them an ultimatum — pay up or lose your benefits.”

Other States

Mike Kreidler, Washington state’s insurance commissioner, issued a similar announcement earlier this month.

Regulators in Louisiana and South Carolina have also made public efforts to oppose the current SHIP rehabilitation approach.

Pennsylvania regulators say that they and colleagues in California, Florida, Illinois and Texas all seem to support the idea of rehabilitation, and that 96% of the affected policyholders live in those states.

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