State moves to cap long-term care insurance premium rate
reforms will protect seniors from skyrocketing annual rates
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CHICAGO -- Illinois Department
of Insurance Director Andrew Boron announced on Wednesday an effort
by the department to protect long-term care policyholders. The
Department of Insurance, with help from state Rep. Robyn Gabel, 18th
District, Evanston, has proposed
House Bill 2333, which calls for a 15 percent annual cap on the
premium rate for a policyholder's long-term care insurance.
Long-term care refers to the services and supports provided to
people who need assistance with basic activities, such as bathing
and dressing, because of chronic physical illness or disabling
conditions such as dementia.
To offset the high costs associated
with long-term care, many people purchased insurance coverage. These
policies were originally sold as having "level" premiums that would
not increase based on age or health situation. Now, the
policyholders who have been paying for a decade or more are shocked
to receive notice that their monthly premium has skyrocketed -- as
much as 200 percent.
"State regulators have no discretion to limit premium increases
if the rate filing meets standards, so we set out to change the law
to further protect consumers. This proposal would impose a 15
percent cap on rate increases on all existing and future long-term
care premiums, regardless of age or benefit configuration," said
Boron. "And I want to thank Rep. Gabel for her support of our effort
to change the law."
"Insurance companies did not break the law when they decided to
raise rates, but it seems unconscionable to charge such exorbitant
amounts of consumers who are often retirees living on a fixed
income. Policyholders say they had only two devastating choices --
either find a way to pay up now or face the possibility of not
having long-term coverage when you need it. House Bill 2333 will
help prevent this type of devastation," said Gabel.
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Long-term care services and support are provided in a variety of
settings -- in homes, in community settings such as adult day
centers, and in institutional settings such as nursing homes and
assisted living facilities. It is estimated that almost 10 million
people in the United States need long-term care services and
supports, and about 6 million of them are age 65 and older.
The mission of the Illinois Department of Insurance is to protect
consumers by providing assistance and information, by efficiently
regulating the insurance industry's market behavior and financial
solvency, and by fostering a competitive insurance marketplace. The
department assists consumers with all insurance complaints,
including health, auto, life and homeowner. Consumers who have
questions or concerns about their insurance may contact the
department's Consumer Division at
http://insurance.illinois.gov/ or call 866-445-5364.
Illinois Department of
file received from the
Illinois Office of Communication and Information]