A long-term care insurance rate increase is under review in Maryland, and premiums have been rising for policyholders in a number of states. Regulators are currently reviewing requests from several major carriers, some sold nationally, for increases as high as 242%. Here’s what’s driving this and what options policyholders generally have.
What’s Actually Changing
Four long-term care insurance carriers have filed for rate increases currently under review by Maryland’s Insurance Administration:
- MedAmerica Insurance Co. – requesting a 242% increase
- John Hancock Life Insurance Co. – requesting increases ranging from 27% to 142% across 19 different policy types
- Union Security Insurance Co. – requesting a 101.1% increase
- Transamerica Life Insurance Co. – requesting a 39.7% increase
These filings affect nearly 12,700 Maryland policyholders. John Hancock and Transamerica, among others, are large national companies, so similar filings can appear in other states over time.
Why This Is Happening
Insurers generally cite two factors: policyholders are using their long-term care benefits more than originally projected, and living longer than originally projected. Regulators typically don’t approve the full amount requested – in one recent Maryland case, a carrier requested a 212.3% increase and was approved for 32.25%.
Why This Matters for You
If you own a long-term care policy, it’s worth understanding your options ahead of time, whether or not you’ve received a rate increase notice yet. Most policies offer several ways to manage a rate increase besides paying the full amount or letting the policy lapse.
What You Can Do
- Review your options before making any decision. Most carriers are required to offer alternatives to a full rate increase.
- Ask about reducing your daily or monthly benefit amount, which lowers the premium while keeping core coverage in place.
- Ask about reducing your benefit period, another common way to bring the premium down.
- Consider adjusting or removing an inflation rider if your policy includes one, which can meaningfully affect the premium.
- Compare your options against buying new coverage. Long-term care coverage purchased new at an older age is typically more expensive, and not always available, so it helps to understand what you’d be giving up before making changes to an existing policy.
Let’s Review Your Policy Together
If you’ve received a rate increase notice, or you’d simply like a second look at your long-term care coverage, we’re glad to walk through your options at no cost and no pressure. Reach out anytime for a free long-term care insurance review.
