How High?

A prior post on this blog noted that CalPERS was considering raising its rates for long-term care insurance by 75%.  We noted that although UC was not under CalPERS, as state employees, UC employees have been allowed in the past to participate in the program. We also noted that such insurance is a very iffy proposition since it is hard to forecast costs many years ahead for long-term care and thus rates could go up (a lot).

Turns out, that CalPERS is indeed planning to raise the rates.  But now the increase may be as high as 85%.  From the Sacramento Bee:

CalPERS is preparing to impose a rate hike of up to 85 percent on most of its long-term care insurance policyholders. The rate hike would begin in 2015 and would be phased in over two years. It would affect three-fourths of the 150,000 CalPERS members who've bought long-term care policies, which pay for stays in nursing homes, convalescent homes and so on.

The proposed increase is somewhat higher than the 75 percent rate hike contemplated by CalPERS officials the past several weeks. The earlier estimate "was a work in progress," CalPERS spokesman Bill Madison said Wednesday. As an alternative, CalPERS staff said the pension fund could raise rates 79 percent but do it in one year instead of two...

Full story at:

http://www.sacbee.com/2012/10/11/4900888/calpers-considers-85-rate-hike.html

So how high could rates go in the future?  One might ask, how high is the moon?

Update: Jon Ortiz of the Sacramento Bee provides a link to the CalPERS agenda item:
CalPERS LTC Recommendation and Analysis

Update: It looks like they are going ahead with the rate hike:
http://www.sacbee.com/2012/10/16/4916230/calpers-committee-votes-to-hike.html