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.