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Newspaper reports about an 85 percent hike in the cost of long term care insurance offered to California State employees tells only part of the story according to Jesse Slome, executive director of the American Association for Long-Term Care Insurance.
Slome noted that letters mailed to CalPERS policyholders offer seven options. “The letters clearly explain that options include accepting the premium increase and keeping current coverage to reducing options such as the built-in inflation protection and even reducing the premium paid,” Slome notes. “Isn’t it funny how that never gets mentioned in the news coverage.”
“No one likes paying more,” Slome adds. “But in many cases these polices were purchased 15 years ago and the economic world has certainly changed over the past few years; not to mention that many of these folks are beneficiaries of increasing State-provided pensions.” Long-term care insurance policies offering five percent compounded growth options have been the ones most impacted by rate increases.
The Association executive explained that current CalPERS policyholders will very likely still be paying less money for their coverage than they would for new coverage. “We field calls from consumers outraged but when they hear what comparable coverage costs today, they realize the value in what they have.” Slome notes that very few policyholders will drop their coverage.
The American Association for Long-Term Care Insurance was established as a not-for-profit trade group and focuses on educating both consumers and insurance professionals. For additional information on long term care insurance costs visit the organization’s website.