Today's Sacramento Bee carries a cautionary story for you, if you have bought a CalPERS long-term care policy or might consider doing so in the future (if they are again offered). Excerpts below:
...CalPERS is considering imposing a 75 percent increase in premiums on the vast majority of its long-term care policyholders... Leading private insurers, facing declining profits and many of the same financial issues confronting CalPERS, are dropping coverage or restricting sales. Because it's difficult to buy coverage once someone turns 80, many CalPERS policyholders would have no alternative but to pay the higher premiums if they wanted to stay covered... Details on the proposal will be presented to CalPERS' pension and health benefits committee Oct. 16, with final approval by the full governing board expected a day later...
Because of the program's financial problems, CalPERS has suspended selling new policies since 2008... CalPERS also plans to give members the option of switching to a less comprehensive policy as a way of mitigating the rate hike. Currently, most policies provide lifetime benefits with inflation protection. The new plan would cap benefits at 10 years without inflation protection. Because most people don't need more than a few years of nursing home care, CalPERS says the cheaper policy will prove popular.
In short, although long-term care plans may seem appealing, as a practical matter it is very difficult for individuals to lock in a benefit and cost that will extend years into the future. Long-term care is really part of that more general U.S. healthcare system which is in flux.
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