A new state law that puts more information and tools into the hands of Connecticut’s insurance regulators surrounding long-term care plans will soon take effect.
Gov. Ned Lamont signed the bill on Tuesday, and it goes into effect July 1.
Long-term care insurance helps pay for a range of caregiving services. People purchase these policies decades in advance, and in Connecticut have reported seeing double-digit increases on their premiums.
“We've seen astronomical increases year after year after year, and consumers are rightly fed up,” state Sen. Matt Lesser said. “So we need to scrutinize this.”
Lesser, a Democrat from Middletown who co-chairs the Human Services Committee, said the cost of care services can be staggering.
For example, nursing home care in Connecticut costs on average about $526 a day, according to data the Office of Policy and Management published in April.
“Unless you're fantastically wealthy, most people will go broke if they're there for any substantial amount of time,” Lesser said. “And when that happens, typically Medicaid is what picks up the slack.”
Eyes on the industry
Under the new law, insurance carriers are mandated to report each individual and group policy’s actual losses to the state every year. The figures will offer more insight than projections alone, allowing the state to better judge whether increases are supported by evidence, Lesser said.
That information from carriers must be posted to the websites of the state insurance commissioner and governor’s budget office by Oct. 1, 2027. The law also gives the state attorney general the power to investigate insurance companies.
An investigation by the Connecticut Mirror last year showed the state has received hundreds of consumer complaints about long-term care coverage, with customers facing price hikes often exceeding 50%.
A report by the New York Department of Financial Services found those dramatic increases can be traced back to pricing errors made by insurance companies decades earlier when customers first signed the policies. Carriers substantially underpriced them because of incorrect assumptions about factors such as policyholder behavior and the future costs of health care, the report found.
Amelia Smith, a retired state employee, was among the residents who told state lawmakers how premiums have risen exorbitantly — in her case, nearly tenfold. The starting price was $85 in 1994 and now it’s $830 a month, a price Smith doesn’t know if she will be able to keep paying next year.
Lesser said these increases are something people could not have planned for when they first took out their policy.
“It's really devastating to folks who are living on fixed incomes,” Lesser said.
