By JLP | July 9, 2013
Rob and Katherine Deane thought they were being responsible by buying insurance policies to provide for care in their later years. Instead, the Michigan couple are encountering a growing gap in health-care coverage that the government overhaul will do nothing to fix.
The Deanes say they got hit last year with rate increases on both of their long-term-care policies, insurance plans that pay for nursing homes or in-home care. Manulife Financial Corp.’s MFC.T +3.29% John Hancock unit told Mrs. Deane that the premium on her 10-year-old policy would jump 77% to $6,406 a year. Her husband’s insurer, Unum Group, UNM +9.68% increased his premium by 25%.
After they complained, Hancock trimmed Mrs. Deane’s rate hike to 46%. In exchange, she agreed to shrink the policy’s benefit period to six years from 10. “Seniors are really getting hammered,” says Dr. Deane, a 76-year-old retired surgeon.
That quote is from this article last week while on vacation:
I was in the insurance business for a few years back in the late 90s. I remember listening to the insurance reps talk about long-term care insurance. It sounded like a no-brainer at the time. Start when you’re 50-years old and then the policy will be there when you’re old and grey and need it. When asked about the potential for premiums to increase, the sales rep usually shrugged it off and said that rates could only be increased on the group (in other words, they couldn’t single out people). It sounded mildly comforting to me at the time.
Now the reality…
Insurance companies are exiting the business and those who are still in it are driving up premiums. Those still holding policies are seeing their premiums skyrocket (a 77% increase???). So much for planning ahead and trying to do the right thing. Granted, this couple can probably afford the premiums but there are lots of others who can’t.
I know it won’t happen but insurance companies should do the noble thing and refund premiums to those who want them back since they weren’t able to hold up their end of the bargain.