Early CalPERS Long-Term Care clients squeezed by rate hikes
Two impending hikes that would boost premiums for existing CalPERS Long-Term Care insurance customers by 90% make coverage hard to justify, one policyholder said.
May 27, 2021 5 MINS
Financial adviser Lawrence Grossman is holding onto a long-term care insurance policy he started 20 years ago, even though his premiums are five times what they originally were.
But that might not be the case for much longer. With two impending rate hikes that will increase premiums for existing CalPERS Long-Term Care insurance customers by 90%, the cost will be hard to justify, Grossman said.
That wasn’t supposed to happen, he said. Two decades ago, California’s then-young program offered competitive rates that were marketed as intended to stay low over time. After rate increases in 2013, some participants sued CalPERS, claiming that the program broke a promise not to increase rates, leading to a consolidated cl
Yves here. Please welcome Lawrence Grossman, who with his wife is a CalPERS long-term care policy holder. Grossman, a financial analyst, describes the extreme underfunding of this zombie program. The rate increases that CalPERS is putting through, a 900% increase over the rates charged at the outset, are wildly disproportionate to the level of any other significant long-term care program. In other words, even by the standards of an industry that is in deep financial trouble, CalPERS’ rate increases are such an outlier that it is hard to explain them solely as a result of the original underpricing. It is not unreasonable to suspect that mismanagement also contributed to this sorry outcome.
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Organizations representing federal employees and retirees are hopeful that a controversial tax rule that limits the Social Security benefits of former feds who have spent time in the private sector could soon be a thing of the past, thanks to two bills making their way through Congress.
The windfall elimination provision reduces the Social Security benefits of retired federal, state and local government employees who worked in private sector jobs in addition to a government job where Social Security is not intended as an element of their retirement income, like employees in the Civil Service Retirement System.
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AFSA is pleased to present a Zoom Webinar on the Federal Long Term Care Insurance Program (FLTCIP), the second webinar of 2021 in the Federal Benefits Series. The program will take place via Zoom on Tuesday, March 2 from 1:00 to 2:00 p.m. EST.
Nathan Sebert, a Senior Account Manager at Long Term Care Partners, will:
discuss the importance of long term care planning;
review FLTCIP benefits, including new features of the FLTCIP 3.0 plan, which offers a premium stabilization feature;
provide tips on designing your own plan, and review costs;
and cover important information on FLTCIP eligibility and enrollment.