Specifically, the report examines the Federal long-term Care Insurance Program (FLTCIP), the largest private-sector long-term care insurance program in the nation.
?As a voluntary plan typically consists of employees, this is a more representative group,? says Jesse Slome, executive director of the American Association for the Care Insurance Long Term (www.aaltci.org), one of those interviewed by GAO staff preparing the study. ?Instead of hyperbole, we now have facts to show that most consumers understand the value of its long-term protection care insurance and do not drop or reduce coverage, even when facing a rate increase ?.
In 2009, some 146. 415 participants in the federal program, approximately two thirds of the members at the time, were notified that their premiums were subject to an increase of up to 25 percent. All these members had chosen an option to hedge against inflation in particular ? about 5 percent compound inflation automatic option (ACIO). Most members FLTCIP against premium increases made no change in benefits. Specifically, 46 percent or 67,511 people retain their coverage with the option of inflation of 5 percent and the compound chosen to pay the premium increases.
An equal percentage of individuals opted to reduce inflation to the future growth of the protective benefits of a 4 percent (ACIO), either by switching to the new plan FLTCIP II (26 percent) or maintain the original plan ( 20 percent). The new benefit plan provides better coverage. For example, it covers 100 percent of the cost of home care and adult day care. The previous plan covered these costs by up to 75 percent.
All enrolled in the plan that reduced their protection to 4 percent ACIO maintained their (current) amount of the benefit would increase daily in reducing the rate ACIO. Only 1.6 percent of members meet the increase in the premium, or 2344 individuals coverage expired and are no longer enrolled in the program. ?We have long sought to counter the perception that the rate increase caused a large number of people from coverage,? Slome acknowledged. ?People understand the risk they face when buying long term care insurance and protection becomes even more valuable as it was.?
?What may surprise many is that 23 percent of the insured actually experienced up to a five percent reduction in their premiums,? says Slome. 18 percent had a decrease of 0.1 percent and five percent.
The Federal Long-term Care Insurance Program currently has 268 200 members (as of June 30, 2011). In 2009, a 7-year contract for the program was awarded to John Hancock Life Insurance Company.
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Source: http://lifeinsurancehealth.net/government-study-examines-long-term-care-insurance-rate-increases/
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