CalPERS Votes on Higher Long-Term Care Insurance Rates
A CalPERS committee on Tuesday voted unanimously to recommend a 33.6% increase in long-term care insurance rates, the Sacramento Bee reports. With about 173,000 policyholders, CalPERS is the second-largest purchaser of long-term care insurance in the U.S. after the federal government.
The increase would help CalPERS offset an estimated $600 million deficit over the next 50 to 60 years and establish a reserve.
The full CalPERS board on Wednesday will vote on the new rate, which would take effect July 1, 2007, and apply to policyholders who purchased plans between 1995 and 2004. The plan under consideration would allow current policyholders one opportunity to replace higher cost plans with lower-cost plans that offer short-term coverage.
The board in 2003 approved a 17% average increase in long-term care insurance rates (Chan, Sacramento Bee, 11/15).