Florida regulators said Wednesday they have scheduled a hearing Aug. 12 on requests by two companies to raise long-term care insurance rates up to 95 percent and 114 percent.
Hearings for MetLife and Unum mark the latest developments in rocketing rates that have distressed seniors like Bernard Haut, 81, of Boynton Beach.
“They are forcing people who probably can’t afford this increase to give it up when they now need it more than ever,” Haut told The Palm Beach Post in May.
The insurance pays for services for people who need help with things like bathing, dressing, eating or housework, at home or an assisted-living facility. Such services are not comprehensively covered under Medicare, and more than 10 million people have purchased policies from the private market. But insurance companies say costs have exploded as people live longer and begin to use the services more.
Metropolitan Life Insurance Co., the largest life insurer in Florida and one of the largest players in long-term care, is proposing an average premium increase from $1,593 to $2,580, the state’s Office of Insurance Regulation said.
MetLife has more than 22,000 long-term care policyholders in Florida, including 1,883 policies in Palm Beach County and more than 2,000 in Broward County, its two largest markets in the state.
Unum Life Insurance Co. of America, the largest provider of disability insurance in the U.S., has more than 45,000 long-term care customers in the state. Its average annual premium would rise from $581 to $862, officials said. It has about 1,500 customers in Palm Beach County.
Regulators have not always been persuaded that the full requested increases were justified in Florida, records show. Since 2010, the cumulative industry average increase granted by Florida regulators among about two dozen companies was 20.6 percent, though companies often asked for much more — as much as 148 percent.
In May, MetLife spokeswoman Judi Mahaney told the Post, “The long-term care insurance industry as a whole is facing challenges as a result of evolving actuarial assumptions on pricing, and MetLife is no exception.”
The company offers ways to “mitigate” the impact of rate increases through options that can include reducing benefits, she said. For customers who cancel because of an increase, policyholders can get reduced benefits up to an amount they have already paid in premiums, Mahaney said.
MetLife had no additional comments this week.
Here is a full statement from Unum:
“Unum determined the prices for its long term care (LTC) business using the best data available at the time and applying assumptions and predictions about how future experience would develop. Unfortunately, like many in the industry, our actual experience in the years or even decades since those policies were issued has turned out to be significantly different than the actuarial assumptions used to set the original premiums. The individuals who are covered under the LTC policies are both living longer and holding on to their policies longer than anticipated, leading to more claims being made. Once on claims, they are also staying on claim longer than expected. At the same time, investment earnings, which are used to support the payment of claims, continue to be significantly lower than projected given the overall, sustained low-interest-rate environment.
“One of the steps we have taken at Unum to decrease the financial risk posed by our long term care block of business is to file for premium rate increases as allowed under our contracts and the law.
“We know how difficult rate increases can be for policyholders. We will continue to provide alternatives to manage affordability for our customers. This may include options to adjust the inflation cap, reduce the benefit period or adjust the daily benefit levels. We also provide the policyholder the ability to take a non-forfeiture option whereby there no longer pay premiums going forward and can receive a benefit equal to the premiums paid for the policy to date.
“We don’t want to see any policyholder lapse their policy as a result of a rate increase and believe we offer reasonable and affordable alternatives.
“We take very seriously our commitment to providing service to our current policyholders – over one million insureds in the U.S. – and have a team of more than 150 professionals dedicated to providing customer service and administering benefits to those people who are currently on claim. We paid over $370 million in benefits during 2015, reflecting both our commitment and the value of these policies to consumers.”
Hearing on MetLife, Unum
- Date: Friday, Aug.12
- Time: 1 p.m.
- Place: Kovens Conference Center, Room 1145, Florida International University, Biscayne Bay Campus, 3000 NE 151st Street, Miami