Little wonder insurance premiums are going up with the threat of Obamacare just around the corner and 28 million new health care recipients waiting to cash in. The next question is if ObamaCare is struck down by the Supreme court will the premiums go down? My first reaction is, no way.
The fight to bring health care under control will be much more difficult given the increases in the number of people expecting free care that is happening now. It's like anything that has increasing prices due to demand or liability, once they are up they never go down. One other thing that has the same characteristics, taxes!
Long-Term Care Insurance Policy Costs Rising
Source: Christine Dugas, "Long-Term Care Insurance Policy Costs Rising," USA Today, March 29, 2012.
Just as aging baby boomers are realizing they may need long-term care insurance, the marketplace is shrinking, the cost of premiums is soaring and providers are altering the policies they offer, says USA Today.
Long-term care insurance helps cover expenses that typical health insurance doesn't, such as nursing homes, in-home care and assisted living.
Insurance companies have been making major adjustments because the claims on long-term health care policies have exceeded their predictions. The reason: People are living longer and developing long-term illnesses, says Deb Newman of the Life Foundation. Meanwhile, near-record-low interest rates have depressed what the industry earns on the premiums it collects.
This month, Prudential Financial, one of the top five carriers of individual long-term care insurance, said it was exiting the market. Now, 10 of the top 20 individual long-term insurance carriers have bailed out in the past five years, according to LIMRA, an industry-sponsored group.
The remaining insurance carriers have raised premiums. Long-term care insurance policies are now 6 percent to 17 percent higher than in 2011, the American Association for Long-Term Insurance says. Existing policyholders also have been hard hit by rate increases.
Trying to address consumer complaints, the industry has created hybrid products that combine life insurance or annuities with long-term care. Hybrids are gaining traction. For example, New York Life Insurance says its hybrid is popular because it has an either/or benefit.
Consumers who can afford to put their savings into the hybrid, which requires a one-time payment, can use the money for long-term care if they ever need it, or they will have a life insurance benefit when they die.
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