The Des Moines Register recently wrote an editorial on long-term care insurance. (“Long-term care policies have their risks”, Sunday, September 21st, 2014)
Everyone has a different opinion about long-term care insurance. But if the largest publisher in Iowa is going to draw conclusions about long-term care insurance, the least they should do is some basic research into the existing insurance regulations. Below is the response that I posted to their website:
Unfortunately, this editorial does not tell even half the story about long-term care insurance premium increases.
In 2003, the Iowa Insurance Division foresaw the need to protect Iowans from uncontrollable long-term care insurance rate increases. Therefore, the Iowa Insurance Division enacted a Rate Stability Regulation effective February 1st, 2003. (refer to Iowa Administrative Code 191—39.26 & 39.28)
The “Iowa Guide to Long-Term Care Insurance”, published by the state of Iowa, explains on page 21:
“Regulations effective February 1, 2003 make rates more stable and increases less likely. These regulations apply to all new individual and group policies issued on or after February 1, 2003. However they DO NOT apply to individual policies issued before February 2003.”
Policies purchased before February 1, 2003 are not protected by Iowa’s Rate Stability Regulation. Nearly all of the premium increases that have been approved by the Iowa Insurance Division have been on policy forms that were issued before February 1, 2003.
In fact, of the nine A-rated long-term care insurers that sell about 90% of the individual LTCi policies today, NONE of them have had premium increases on the policies they’ve sold in Iowa since February 1st, 2003.
Why would the Des Moines Register not mention Iowa’s Rate Stability Regulation (and it’s success) in this editorial? The answer is probably that the Des Moines Register was unaware of the regulation. The insurance industry and insurance regulators have done a poor job of educating the public (and journalists) on the long-term care insurance rate stability regulations that are in place now, in over 40 states.
Scott A. Olson