LTCI holders can be stuck with astronomically rising premiums

Individuals buy long term care insurance policies to preserve their assets for their families. Therefore, preventing the liquidation of assets to pay the nursing home. Additionally, the LTCI policies also allow people to live longer and independently at home, through home care,and can help pay for an assisted living facility.

However, those LTCI holders can be stuck with astronomically rising premiums. As stated in Home News Tribune the Department of Banking and Insurance this year alone approved a 35 percent rate hike for Lincoln National, a 30 percent increase for MetLife of Connecticut and 25 percent increases for American General and Allianz.

The annual cost for an assisted living facility averages $50,000 and a semi-private room in a nursing home averages $100,000.

But the costs of providing care have been rising far less than some of the increases in the long-term care insurance premiums. A report by Prudential Financial released last week says long-term care costs increased an average of 6 percent a year since 2004. And annual increases have been even lower than that since 2006, the report said.

Nonetheless, double-digit increases are becoming increasingly common for the nation's 10 million policyholders. Therefore, consumers are left with three bad choices: keep up with the increase and cut back on discretionary spending, pay lower premiums and take a cut in benefits or give up the policy and forfeit all the money invested in it.

Rep. Frank Pallone Jr., D-N.J., chairman of the House Energy & Commerce Health Subcommittee, announced he will have the subcommittee conduct a thorough review of the dramatic increases to see if they are justified. The subcommittee also will hold hearings on the long-term care insurance industry that Pallone says could lead to a framework for federal regulations. As part of those hearings, it should consider the imposition of a cap on premium increases over a specified period of time.

Long-term care insurance is not an entitlement. But it is purchased by responsible people trying to do the right thing. The federal government and the States need to do all they can to make it easier and more affordable for people to do so.

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