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Tuesday, September 1, 2020

CalPERS Slams Door & Prepares to Raise Rates on Long-Term Care

Although UC is not part of CalPERS, when that organization began to offer long-term care insurance years ago, it allowed UC employees to participate. But then it substantially raised its initial premium rates, forcing participants either to pay or reduce or drop coverage. Whether what happened was a deliberate low-balling of rates initially or just a miscalculation of the actuarial costs of the insurance really doesn't matter at this point. Either way, participants got a bad deal.

CalPERS is now announcing that it has closed the door to new participants and is preparing to raise rates again:

The CalPERS Board has decided to temporarily suspend open enrollment in the CalPERS Long Term Care Program due to current uncertainty in the long-term care market. Therefore, effective June 17, 2020 and until further notice, the CalPERS Long-Term Care Program will not be accepting new applications for coverage. Applications presently in underwriting will not be processed. In September the CalPERS Board will be considering premium increases for its current Long-Term Care products.

Source: https://www.calperslongtermcare.com/

The notice is also on a UC webpage dealing with long-term care:
https://ucnet.universityofcalifornia.edu/tools-and-services/administrators/long-term-care-insurance-faq.html

Yours truly has never been enthused about long-term care insurance as a practical matter. While the issue is purports to address is real, the problem is that you have to assume that some private insurance company - at a point in your life where you may not have the capacity to advocate for yourself - is going to do the right thing for you years from now. By that time, the company may have merged or who-knows-what, even if you trust it today. It might have been thought that CalPERS, as a public entity, would behave more reliably. The record speaks for itself.

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