CalPERS weighs huge premium hike for long-term care

Posted in the Fairfield Forum


Vallejo, CA

#1 Oct 4, 2012
CalPERS weighs huge premium hike for long-term care

It's an old-age safety net offered to California public employees: insurance to cover the exorbitant cost of staying in nursing homes, assisted-living facilities and the like.

Now most of the 150,000 or so Californians who buy long-term care insurance from CalPERS are facing what could be a big rate hike.

CalPERS is considering imposing a 75 percent increase in premiums on the vast majority of its long-term care policyholders. They would pay hundreds of dollars a year more – thousands, in some cases – as the California Public Employees' Retirement System tries to fix financial holes in the program.

Customers would be offered a less comprehensive policy as a cheaper alternative. Still, the prospect of a big hike, which would take effect in July 2015, is rattling nerves.

"It's going to be traumatic," said Sacramento policyholder Harvey Robinson, 69, president of the Retired Public Employees Association of California. "You're going to have people go into sticker shock."

The looming rate hike comes as the population ages and the demand for long-term care rises. Some 70 percent of all Americans over the age of 65 eventually will need long-term care, according to the U.S. Department of Health and Human Services. A nursing home stay can be financially catastrophic, costing $75,000 a year or more and wiping out savings.

Vallejo, CA

#2 Oct 6, 2012
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