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Key lawmakers this week said there is an urgent need to reform long-term care insurance for Connecticut residents, and they are considering a raft of legislation that would provide relief to policyholders and boost transparency around the state’s rate review process.
The comments follow a Connecticut Mirror investigation on long-term care insurance that found the annual cost of maintaining coverage has skyrocketed for many residents due to miscalculations by insurers on how long people would live, the price of care and how many would need it. Policyholders complain of dramatic rate increases, often exceeding 50% and, for a few dozen people, as high as 174%, according to a CT Mirror analysis.
“This situation is completely outrageous and unconscionable,” said Rep. Matt Blumenthal, D-Stamford, House chair of the Government Administration and Elections Committee, who has introduced a bill to cap rate increases. “It’s hard to think of a greater consumer protection injustice in the marketplace.
“It’s vitally important for us to pass stronger protections as soon as possible.”
Senate President Pro Tem Martin Looney, D-New Haven, said legislation on the issue is a priority this year.
“I certainly think the Insurance and Real Estate Committee should impose requirements on our insurance department to be more aggressive in their examination of these companies, require public hearings on rate increases, and other measures,” he said. “I would be supportive of anything the committee would recommend, because this has become a really terrible problem.”
Nearly 100,000 people in Connecticut have long-term care insurance, coverage that, depending on the policy, supports skilled in-home care, rehabilitation therapy, assisted living, nursing home stays and respite care.
A CT Mirror review of rate hikes from January 2019 to October 2024 shows more than 17,000 people with long-term care policies have gotten hit with increases of 50% or more. Some of the biggest companies in the market, including Genworth Financial, Metropolitan Life Insurance Company and Transamerica Life Insurance Company, requested hikes for five years in a row beginning in 2019.
When large providers seek premium increases, thousands of consumers can be impacted. In 2019, for example, Genworth Financial requested a 40% rate hike on more than 9,000 Connecticut policyholders. In 2021, Transamerica requested a 20% rate increase on 8,000 policies. The Department of Insurance approved both requests with no changes.
In 2022, Genworth raised rates for more than 2,000 people by an average of 97%, with increases ranging from 79% to 173%, depending on the policy. The approved amounts were a slight reduction from the company’s original request.
A spokeswoman for Gov. Ned Lamont said the governor is aware of the pressure premium hikes have put on customers.
“We recognize that rate increases in the [long-term care] insurance market have been a real issue for policyholders in Connecticut and nationally,” said Julia Bergman, the spokeswoman. “Residents are experiencing large increases on polices they may have paid into for years and even decades at a time when they are likely least able to afford it, retired and on a fixed income, and getting closer to potentially needing access to benefits due to aging and disability.”
Lamont did not address questions about whether he would propose legislation on long-term care coverage.
As consumers are squeezed, grievances filed with the Connecticut Insurance Department have mounted. The office received more than 700 complaints in the last six years about long-term care insurance, mostly rising premiums.
Solutions have been elusive. Legislators introduced more than 50 bills from 2019 to 2024, with only a small number passing and offering limited relief. They blamed budget constraints and pushback from insurers, among other problems.
But this year, several lawmakers say they are making a renewed push to help policyholders.
“We have to intervene right now to stop these out-of-control premium increases,” said Sen. Saud Anwar, D-South Windsor, co-chair of the Public Health Committee, who himself has introduced legislation. “I am going to be strongly supporting a meaningful bill.
“We are representing the people of Connecticut; we are not representing the insurance industry. We have to fix this issue and take care of our seniors.”
Sen. Jorge Cabrera, a Hamden Democrat who is co-chair of the Insurance Committee, said he is exploring broad, comprehensive changes to the issue.
“Something has to be done,” he said. “But I don’t want to put a Band-Aid on it and then in a year or two be right back here. I’m looking for a long-term solution.
“It is in my interest to tackle this. … I really am trying to find some relief.”
At least 12 bills have already been introduced this session to address long-term care insurance. The concepts include a cap on annual rate increases that exceed 4%, a requirement that any rate hike of 20% or more be phased in over five years (instead of three, as current law states), a mandate that carriers offer a full refund for premiums paid to any policyholder who requests it (provided the plan has existed for at least five years and the consumer has not submitted any claims), requirements for public hearings on rate hike requests, tax credits and deductions for policyholders, a four-year moratorium on rate hikes, and an edict that insurers give people “explicit notice” of the “high risk” of premium increases before they purchase coverage, among other proposals.
Looney said lawmakers could also look at a public long-term care insurance program similar to what Washington state recently created with a payroll tax.
Rep. Ron Napoli Jr., D-Waterbury, called for an audit of the Insurance Department’s rate review process.
“There should be some type of outside audit to see exactly why these increases are happening,” said Napoli, whose parents have long-term care insurance and have faced rate hikes. “We’ve got to get to the bottom of it and try to find ways to bring people who have made these investments some type of relief.”
Jim Carson, a spokesman for the insurance department, said the agency’s rate review process is “fully transparent.”
“The department’s [long-term care] actuarial review process is thorough and complies with Connecticut state laws and regulations,” he said. “Every rate filing being reviewed is posted publicly on our website.”
Blumenthal said lawmakers can’t be “bullied” by threats of insurance companies becoming insolvent.
“Some of these insurers have threatened to withdraw or otherwise drop policies, and we shouldn’t allow ourselves to be bullied by threats like that,” he said. “Every option should be on the table for trying to rectify the situation.”
In written testimony on a 2024 bill proposing caps on increases, Eric George, president of the Insurance Association of Connecticut, wrote in joint testimony with two other organizations: “Arbitrary restrictions … could undermine an insurer’s ability to effectively manage risks and jeopardize the financial well-being of companies.”
The issue is drawing support from legislators on both sides of the aisle. Seven Democrats and four Republicans have raised bills this year. Some have introduced multiple proposals.
“It’s something that both sides have always been concerned about,” said House Minority Leader Vincent Candelora, R-North Branford. “The solution is tough, and we probably differ, but I think collectively, it really is not a political issue. It’s one of fundamental fairness.”
House Speaker Matthew Ritter, a Hartford Democrat, said the problems with long-term care insurance “call out for solutions.”
“Not every problem is solved by a new law,” he said, “but this seems like a very unregulated space that may be time for the legislature to take a strong look at.”
Do you have experience with long-term care insurance? Have you tried to purchase a policy, but found it unaffordable? Are you struggling to hold onto your plan, or have you dropped it? We want to hear from you. Please get in touch with reporter Jenna Carlesso at jcarlesso@ctmirror.org.