“We are hearing from a growing number of CalPERS long term care insurance policyholders who are confused about what to do,” explains Jesse Slome, executive Director of the American Association for Long-Term Care Insurance.   The organization has created a new online presentation designed to outline considerations and next steps and to share pricing for long term care insurance available currently to California residents.

The impacted long term care insurance policies tend to offer lifetime or unlimited benefits coupled with an annual five percent compounded increase in daily benefit amounts the Association director notes.  “This was the Rolls Royce level of coverage when they purchased it and is not even available from most insurers today,” Slome notes.

According to the Association, a 65-year old single individual applying for $547,500 of long term care insurance coverage without the future five percent inflation growth option will pay between $4,200 and $8,200 a year.  Similar level of immediate coverage including the five percent annualized benefit growth option will cost between $10,100 and $19,900 per year according to the long term care trade group.

“Individuals with CalPERS long term care insurance policies facing rate increases have time to decide and they can avoid paying more by accepting some of the changes being offered,” Slome notes.  “Inflation is not a factor so why pay to have your benefits increase if you have a pension or Social Security that could pick up some of the cost?  In the end, it makes little sense to even try to compare what you have with new coverage that will cost a whole lot more assuming g you can even health qualify.”

To view the presentation go to http://goo.gl/fMTKd.  For long term care insurance costs connect with a designated specialist member of the American Association for Long-Term Care Insurance by visiting the organization’s website

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“A growing number of older Americans who need long term care have adult children who are able and willing to provide care,” explains Jesse Slome, executive Director of the American Association for Long-Term Care Insurance.   ”They will take time off from their job or even resign creating a financial hardship for their own family or a significant reduction in their pension, Social Security benefits or savings.”

The expert shared with consumers that long term care insurance may pay for care provided by an adult child.  “Not all policies will pay for a family member to care for you, so if this is something you desire, you must specifically ask if the policy offers this benefit,” Slome adds.

“Not all insurance companies offer this option which and policies with this benefit may cost a bit more,” Slome explained to the audience.  “However, if it is important to have a policy that will actually pay a family member to provide some of your care, you must make sure the policy permits this option before you apply.”  The national long term care insurance expert explained that insurance agents not able to sell policies with this option won’t bring up this aspect of the conversation.  “If this is something you think you might want, you must ask the question,” Slome noted.

Between ages 55 and 64 is the ideal time to investigate long term care insurance options according to Slome.  “That is the sweet spot because your health is the single most important factor insurers look for,” he notes.  “After one qualifies for Medicare, those wonderful free health screens may just uncover a condition that may make you uninsurable.”

For long term care insurance costs connect with a designated specialist member of the American Association for Long-Term Care Insurance by visiting the organization’s website or call 818-597-3227.

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“While notification that your rate will increase is never welcome news, headlines often misstate and sensationalize the matter, creating confusion among consumers,” declares Jesse Slome, executive Director of the American Association for Long-Term Care Insurance.   The expert was citing recent flurry of headlines citing an 85 percent rate increase for California retirees who purchased long term care insurance through the State’s benefit offering.

“Only certain policies are impacted and some policyholders could actually pay less, which is something you never hear about,” Slome shared this past weekend with California-based insurance professionals as part of his regular long term care insurance industry update.  “Typically, those people who purchased policies with automatic, annual five percent increase in yearly benefits and those who have lifetime or unlimited policies are impacted by rate increases.”  He noted that the low-interest rate environment has forced many insurers to seek rate increases.

“Insurers invest the premiums paid by policyholders to accumulate the dollars needed to pay future claims,” the long term care insurance expert told the group.  “How can you increase benefits by five percent yearly when you are only able to earn one or two percent?  You can’t so you are forced to raise premiums or give the policyholder the option of changing their policy provisions.”

Policyholders are offered more choices than just ‘pay the new premium’ Slome explained.  Options include changing the daily benefit maximum, converting a lifetime or unlimited policy into one that offers benefits for a specific time period or accepting a different inflation growth option.  “The company will typically maintain the value your policy has grown to but reduce future growth from say five percent yearly to three or three-and-a-half percent for future growth.”

Rate increases typically affect policyholders who have had coverage in place for a number of years.  “The same coverage today would be far more expensive even after the rate increase and that assumes the individual can still health qualify,” Slome shared with the group.  “When consumers call the Association office we explain if they have had their policy for more than two years, equal coverage will cost them more.”

Newer policies, those being marketed today, are less prone to future rate increases, Slome forecasts to the group.  “First, interest rates are at historic lows and likely to increase removing that problem and second, new regulations are in place that offer consumers today added protection from future rate increases,” Slome concluded.

For long term care insurance costs connect with a designated specialist member of the American Association for Long-Term Care Insurance by visiting the organization’s website or call 818-597-3227.

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“I’d love to be paying the same for gasoline as I did 10 or 15 years ago but things change and the same is true with long term care insurance,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance, an organization focused on creating heightened consumer understanding of the importance of planning.  “No one likes to pay more for anything but when an insurer needs a rate increase they typically have to get state approval and, more important, it’s not a take it or leave it option for policyholders.”

Speaking to consumers, the long term care insurance industry expert explained that rates on policies priced 10 years ago are often facing rate increases.  “Not every policy but most often those that include a five percent annual growth of benefits option,” Slome notes.  “An insurer can not raise the payout five percent in today’s historically low interest rate environment so they offer consumers the opportunity to continue paying the same but have future benefits grow at say three percent.”

The biggest misperception when it comes to rate increases for long term care insurance is the belief that consumers have no option except to pay more.  “That just is not the case, insurers voluntarily have decided to offer options to policyholders,” Slome acknowledges.  “There is no law or government ruling that mandates it.  It’s the right thing to do and while many can be skeptical, they are looking to do the right thing for those who bough policies.”

Citing data from the only study of policyholder action following a rate increase Slome points out that when faced with a 25 percent premium increase as part of the Federal long term care insurance program some 46.1 percent of policyholders made no change to their policy benefits and agreed to pay the higher amount.  “Less that two percent dropped their coverage,” Slome admits, “and some took the opportunity to redesign their plan and ended up paying less than they were before.”

The Los Angeles, California-based American Association for Long Term Care Insurance advocates for the importance of planning for long term care. To learn more about long term care insurance costs call the organization’s offices at (818) 597-3227 or visit the Association’s website.

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