CalPERS Devises “Heads I Win, Tails You Lose” Gamble for Long-Term Care Policyholders in Settlement

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The graphic “Settlement Bet” shows options that policyholders have to choose from in the Settlement. The graphic “Settlement Happens??” shows the consequences of the “Settlement Bets” if the Settlement happens or not.

Policyholders not wanting to terminate their CalPERS policies will select not to participate (“opt out”) in the Settlement (as participation will end policyholders’ policies if the Settlement is approved).

Policyholders whose preference in light of announced rate increases would be to terminate because of the new CalPERS rate increases can be divided into two groups in light of the Settlement options: (1) those that wish simply to terminate and stop paying premiums; and (2) those who wish to terminate but are prepared to gamble with CalPERS to get a refund.

In making these choices, all policyholders are being forced to gamble a lot of money. Why the Settlement is structured as a gamble is unclear, but it is. That seems incredibly unfair to policyholders who can ill afford more financial losses after their losses already caused by CalPERS LTC.

Author(s): Yves Smith, Lawrence Grossman

Publication Date: 23 Sept 2021

Publication Site: naked capitalism

CalPERS’ Long-Term Care Fiasco: Private Burial to Hide Malfeasance, Failure to Implement Legislation

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The ongoing CalPERS long-term care insurance program crisis continues to unravel. It is also  revealing overarching behavior which is both unethical and contrary to law.

CalPERS announced insurance premium increases of 52%-90% that become effective very shortly, at the same time that CalPERS has agreed to a class action lawsuit settlement over its last 85% rate increase.  (In my next article I will discuss why I suspect the settlement is another con job by CalPERS.)  But here I first must address a shocking revelation previously unreported about CalPERS long-term care insurance program (LTC) which needs to be recognized before moving on to the issues of the proposed settlement.

There is new and truly disturbing information about the CalPERS long-term care insurance program from a recent review of the enabling legislation prepared by a former California Deputy Attorney General and Court of Appeal Attorney, Linda J. Vogel.

According to Vogel’s analysis, the CalPERS long-term care insurance program  since inception in 1991 has operated contrary to law.

Author(s): Lawrence Grossman

Publication Date: 15 Sept 2021

Publication Site: naked capitalism

CalPERS Long Term Care Program Bleeds Policyholders Dry via 10X Higher Premiums, Gross Mismanagement, Bad Faith Dealing

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To justify the rate increases, CalPERS asserts that there is nothing problematic with the program, other than the usual suspects of low interest rates and unexpected policyholder behavior, issues that all long-term care providers have faced. But that is, at best, a half-truth.

While all other long-term care providers have faced the same challenges, there is no evidence that any other insurer in the nation has responded with premium increases like CalPERS. For example, the Federal Long Term Care Insurance Program has raised rates as much as 150%. For commercial policies, premiums rose up to 75% for UNUM Group in some states, while in California premiums for Mutual of Omaha policy premiums rose 20%, Transamerica premiums rose 25%, and Thrivent premiums rose about 37%.

During the past two decades, roughly the timeframe of the policies subject to the lawsuit, inflation has risen 49% and the cost of long-term care services about 120%. The chart below shows actual policy rates and the initial policy rate along with inflation and long-term care trends.

Author(s): Yves Smith, Lawrence Grossman

Publication Date: 14 May 2021

Publication Site: naked capitalism

COVID-19 Impact on Long-Term Care Insurance 2020 Survey

Link: https://www.soa.org/resources/experience-studies/2021/covid-impact-ltc-2020-survey/

Full study: https://www.soa.org/globalassets/assets/files/resources/experience-studies/2021/covid-impact-ltc-2020-survey.pdf

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Overall, the survey results show that COVID-19 has had an impact on emerging LTC insurance experience through
higher mortality (for both active and disabled lives) and lower claim incidence. Results on voluntary lapse rates were
mixed; however, premium grace period extensions due to COVID-19 may have contributed to differences in
reporting. The survey results also indicated that, in many cases, the impact of COVID-19 has not yet been studied or
there is not yet data available. This was especially true in relation to studying COVID-19’s impact across various
characteristics (gender, attained age, marital status, situs).


For questions studying the impact of COVID-19 on specific assumptions, the effect was measured on a multiplicative
basis compared to the expectation without COVID-19, except for voluntary lapse, which was measured on an
additive basis. See examples in the full survey questions in Appendix A for additional detail.

Authors: Mike Bergerson, FSA, MAAA, Principal and Consulting Actuary
Andrew Dalton, FSA, MAAA, Principal and Consulting Actuary
Robert Eaton, FSA, MAAA, Principal and Consulting Actuary
James Stoltzfus, FSA, MAAA, Principal and Consulting Actuary

Milliman

Publication Date: March 2021

Publication Site: Society of Actuaries

55% of Ontario’s nursing home workers opted for vaccine

Link: https://www.cbc.ca/news/canada/ottawa/55-per-cent-ontario-long-term-care-workers-vaccinated-fears-remain-1.5928220

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Despite the fact long-term care workers were the first in Ontario invited to get the COVID-19 vaccine last December, a little more than half of them have volunteered to get the shot.

As of this week, only 55,000 of 100,000 long-term care workers in Ontario have been inoculated, according to the province’s Ministry of Health.

Dr. Hugh Boyd, chair of the Ontario Medical Association’s section on long-term care and care of the elderly, said a lack of confidence in the vaccine and pervasive myths about the quick development and safety of the shot is at the root of the low numbers.

Author(s): Julie Ireton

Publication Date: 26 February 2021

Publication Site: CBC News

NAIC Reveals 5 Regulatory Priorities for 2021

Link: https://insurance-forums.com/health/long-term-care/naic-reveals-5-regulatory-priorities-for-2021/

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Race & Insurance — The insurance regulatory system, and insurance in general, reflects the society it protects. Through our special committee on race and insurance we will continue to ensure the availability and affordability of insurance products for persons of color and historically underrepresented groups and promote diversity and inclusion within our sector.

Climate Risk & Resiliency — The NAIC is committed to working with state, federal and international stakeholders to coordinate climate-related risk and resiliency assessments, disclosures, and evaluation initiatives so that each state has the information, policies, and tools that promote resiliency and ensure stable insurance markets for its citizens.

Author(s): Insurance Forums Staff

Publication Date: 17 February 2021

Publication Site: Insurance Forums

COVID-19 and Long-Term Care: LTCI Insider

Link: https://www.thinkadvisor.com/2021/01/30/covid-19-and-long-term-care-ltci-insider/

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The impact on the nursing home industry has been catastrophic!

With occupancy rates plummeting, this industry is in deep financial trouble.

The American Health Care Association and the National Center for Assisted Living (AHCA/NCAL) conducted a survey of 953 nursing home providers across the U.S. on their financial and staffing challenges.

Two-thirds of nursing homes operators say they won’t make it another year given current operating pace due to increased COVID-19 costs.

90% of nursing homes are currently operating at a loss or less than 3% profit margin.

65% are currently operating at a loss.

Author: Margie Barrie

Publication Date: 30 January 2021

Publication Site: Think Advisor