Salem - As long-term care insurance rates continue to rise, the Oregon
Insurance Division is urging consumers to carefully examine their options
and how this type of insurance fits into their overall financial strategy.
"Consumers facing rate increases may have options to reduce their
premiums," said Insurance Commissioner Laura Cali. "For consumers
thinking of buying this type of insurance, it's important to consider whether
it complements their long-term financial goals."
In recent months, the Insurance Division has approved long-term care rate
increases affecting more than 29,000 Oregonians, and several other rate
increases are pending. The division has reduced the increases during the
review process - companies originally requested an average 45 percent increase,
but the division approved an average 26 percent increase.
"While these increases are still significant for consumers, they are
much lower than what was originally requested," Cali said. "By
reducing the rate increases, we hope to give policyholders the ability to
maintain their coverage or to adjust their benefits so that they can still
afford it and be able to access benefits should they need long-term care."
Long-term care insurance covers people who are chronically ill in a variety
of settings - at home, in assisted living, or in a nursing home, for example.
Typically, people begin paying premium before they need benefits. They become
eligible for benefits if they can no longer perform certain daily activities
such as eating, dressing, or bathing or if they have a mental impairment
such as dementia.
Long-term care is a relatively new type of insurance and insurers nationwide
have been raising rates over the past several years. That's due to the fact
that policyholders kept their policies longer than expected and are living
longer than projected, using more benefits. In addition, low interest rate
returns are not keeping pace with increases in the costs of long-term care
Consumers will receive letters from their insurance companies at least
45 days before an increase takes effect. The Insurance Division has also
asked companies to notify policyholders of their intentions for future rate
In many cases, consumers facing rate increases can reduce their premium
by reducing the benefits covered by their policy. For example, they could
reduce their inflation protection, which means their policy would cover
a smaller percentage of the costs of care in the future. Other options for
reducing benefits range from reducing the daily benefit amount to shortening
the benefit period.
Deciding how to pay for long-term care services should be part of your
overall retirement planning, Cali said. As part of National Retirement Planning
Week (April 7-11), the National Retirement Planning Coalition has collected
the latest resources to help consumers and financial professionals focus
on long-term financial goals, available at www.retireonyourterms.org.
A summary of the recent long-term care rate increases in Oregon is below.
For a complete list of all the policies affected - as well as pending requests
- click here. For general information about long-term care insurance, click
here or call the Insurance Division consumer advocates at 1-888-877-4894.
Long-term Care Rate Increases
||Average rate increase requested
|| Average rate increase approved
||Number of policyholders affected
|Ability Insurance Company/Medico Insurance Company
|AF&L Insurance Company
|Allianz Life Insurance Company of North America
|American General Life Insurance Company of Delaware
|American Republic Insurance Company
|CMFG Life Insurance Company
|Continental Casualty Company
|Equitable Life & Casualty Insurance Company
|Genworth Life Insurance Company
|Jackson National Life Insurance Company
|MedAmerica Insurance Company/Regence BlueCross BlueShield of Oregon
|Metropolitan Life Insurance Company (to be phased in over 2 years)
|Monumental/Transamerica Life Insurance Company
|Mutual/United of Omaha Insurance Company
|New York Life Insurance Company
|Physicians Mutual Insurance Company
|Provident Life and Accident Insurance Company
|Prudential Insurance Company of America
|Pyramid Life Insurance Company
|RiverSource Life Insurance Company
|Senior Health Insurance Company of Pennsylvania
|State Farm Mutual Automobile Insurance Company
|State Life Insurance Company
|Total number of policyholders
The Insurance Division is part of the Department of Consumer and Business
Services, Oregon's largest business regulatory and consumer protection agency.