Priced Out More people are struggling to hold onto long-term care insurance when they need it most “They sometimes want to double it right away. Practically every two years, they try to increase it. It spoils your life.” – Adriana Falcón Trafford, policyholder “We bought long-term care insurance with the idea that we weren’t going to be a burden to our loved ones. It’s very financially difficult to abandon what I’ve spent.” – Kenneth Kollmeyer, policyholder “Everything is done either in the state’s favor or in the insurance companies’ favor and they just don’t care about the middle class.” – Fred DiMella, policyholder Photo credit: Shahrzad Rasekh / CT Mirror CT long-term care insurance costs are skyrocketing, strangling consumers by Jenna Carlesso, Dave Altimari, Katy Golvala and Andrew Brown January 26, 2025 @ 5:00 amJanuary 23, 2025 @ 11:52 am   The price hikes began in 2007, modest at first, then exploding in size. By last summer, the long-term care insurance plan Steve Krasinski paid $750 a year for in 1994 had ballooned to $6,400. And that’s after he slashed his benefits that help cover home care and nursing home stays. Had Krasinski made no changes to his policy, he would now be paying more than $13,000, nearly 18 times the original cost. Although he has reached an age where he’s more likely to need that coverage, another premium increase will probably push him to abandon the plan. His wife, who took out a $700 policy 30 years ago, faced similar cost hikes and now pays $5,940 annually. “We felt that, OK, we’ll help protect ourselves, and we’ll save the state some aggravation. This will take care of us,” said Krasinski, 88. “I feel completely let down.” “If I keep this up, I’m going to go broke. I wish I never bought the policy.” Krasinski is one of nearly 100,000 people in Connecticut who have long-term care insurance, coverage that, depending on the policy, supports skilled in-home care, rehabilitation therapy, assisted living, nursing home stays and respite care. Many purchased the plans in the 1980s, 1990s or early 2000s with the understanding that the benefits would be available decades later when they might need them. The policies also help people protect their assets, so they don’t have to spend down their savings to qualify for Medicaid, which covers a majority of long-term care services in the U.S. But in recent years, the annual cost of maintaining these plans has skyrocketed due to miscalculations by insurers on how long people would live, the price of care and how many would need it. Policyholders complain of dramatic annual increases, often exceeding 50% and, for a few dozen people, as high as 174%, a Connecticut Mirror investigation has found. As costs rise and consumers are squeezed, grievances filed with the Connecticut Insurance Department have mounted. The office received more than 700 complaints in the last six years about long-term care insurance, mostly rising premiums, according to records reviewed by the CT Mirror. When a premium hike exceeds 20%, Connecticut law requires insurers to spread it out over three years. Even then, some consumers are paying hundreds or thousands more annually. The options for struggling plan holders are bleak. Dropping the coverage could mean forfeiting a portion or all of the funds paid over the years. Many policies allow people to preserve some of their accrued benefits, but others don’t. To curb swelling premiums, consumers can reduce their benefits, as Krasinski did. In his case, that meant dropping daily coverage for care services from $262 to $222, decreasing his policy duration – the years of funding for home care or nursing home stays – from five to three, and eliminating his cost-of-living increases. “Basically, I gutted my policy so I could stay with it,” he said. But even with fewer benefits, many are still dealing with price hikes. The early missteps in estimating how costs would unfold created a system that continues to strangle its customers as they wrestle with canceling coverage or paying ever higher premiums. And the price of new plans for people who want to sign up is out of reach for many. Connecticut Insurance Commissioner Andrew N. Mais Credit: Shahrzad Rasekh / CT Mirror “Let’s be blunt,” Connecticut Insurance Commissioner Andrew Mais said, “there were mistakes made at the start, when long-term care policies were first issued.” To bolster the need for price hikes, carriers threaten that policies could collapse and coverage vanish. State Comptroller Sean Scanlon, who helped lead the Insurance and Real Estate Committee from 2017 to 2021, said threats of insolvency from carriers when he was in the legislature did influence lawmakers, including himself. “It was, ‘Hey, we’re not in Connecticut, but we’re not going to service anybody in Connecticut because we’re going to go out of business if you do this, which is a different kind of threat than the one that I was used to. And it was one I took seriously because it was happening, companies were going under at that time,” Scanlon said. Eric George, president of the Insurance Association of Connecticut, acknowledged that insurers made early stumbles in calculations for long-term care coverage. “There were mistakes made in terms of how many people they expected to drop coverage. A lot of people kept their coverage for longer periods of time and because our longevity has increased so much, the costs are spread out over a longer period,” he said. “We’re getting older. We’re living longer. Health care has improved, and with it, needs … increase.” George said he understands consumers’ anger. “You will always have people upset and understandably so when the cost of any given good or commodity product goes up, especially when it goes up not insignificantly,” he said. “There’s frustration from the insurers’ perspective as well. Insurers want to manage costs and manage what premiums are.” Let’s be blunt, there were mistakes made at the start, when long-term care policies were first issued. Connecticut Insurance Commissioner Andrew Mais But some have expressed outrage at executive pay among insurers as they continue to push for annual increases. Thomas McInerney, CEO of Genworth Financial, one of the largest providers of long-term care insurance in the U.S., received more than $9.8 million in compensation in 2023, including $3.2 million in incentive pay, a portion of which was directly tied to the company’s success in increasing rates for long-term care insurance, records show. Gary C. Bhojwani, the CEO of CNO Financial Group, the parent company of Bankers Life and Casualty Company, another prominent insurer, earned $9.7 million in compensation in 2023. State officials have hit a wall trying to find solutions. The issue has stymied lawmakers, who in the last six years introduced more than 50 bills committed to helping consumers, encouraging new enrollees in long-term care insurance plans and increasing transparency around rate hikes. Only a handful have passed, with limited measures of relief. Legislators fielding complaints about cost increases have tried to create tax credits for people with policies, suggested capping or freezing annual rate hikes, recommended insurers notify consumers of the risk of premium increases before they purchase plans, and proposed holding public hearings so people can weigh in on price hikes — all to no avail. The high costs associated with some of this legislation have snarled progress, as has pushback from lobbyists for the insurance sector who oppose caps on increases, consumer notifications and even public hearings. And while residents facing price hikes for health insurance have the Office of the Health Care Advocate and the attorney general’s health care unit looking out for them, there currently are no state agencies advocating on behalf of people with long-term care policies. Lawmakers acknowledge the General Assembly has dropped the ball on major reform efforts. “This is one of the most significant problems for our seniors,” said Sen. Saud Anwar, a South Windsor Democrat who is co-chair of the Public Health Committee. “They did the right thing by buying insurance … and making a plan for long-term care. ‘Frankly, we failed them.” “It’s almost like modern day snake oil sales in that you’re paying a premium when you’re young, and then when you need it, you can’t afford it anymore,” added House Minority Leader Vincent Candelora, R-North Branford. “So many people are caught in it. They hedge their bets, and then they feel like the insurance premiums are driving them into bankruptcy.” Finding innovative ways to pay for elder care has taken on fresh urgency with the nation’s older adult population set to balloon in the coming years. Across the U.S., the 85-and-older population is expected to more than double by 2040, and Connecticut is home to a disproportionate number of older adults. The state ranks fourth-highest nationally for its share of people in that age group. It’s also sixth in the U.S. for Medicaid dollars spent on long-term care services per resident, well above the national average. While many of the insurers selling or maintaining long-term care policies are headquartered in other states, carriers still have a significant influence in Connecticut that extends to the legislature and state agencies, politicians and state officials said. Policyholders are calling on lawmakers and Gov. Ned Lamont to give the issue new attention this legislative session. They are also pressing the insurance department, which oversees rate requests, to take a harder look at companies’ continued rate hikes.  Kenneth Kollmeyer at his home in Farmington on January 24, 2025. He said he feels like he’s caught in a “death spiral” of increased costs. Credit: Shahrzad Rasekh / CT Mirror “They’re supposed to be looking out for the best interests of their citizenry,” said Kenneth Kollmeyer, 75, a Farmington resident whose annual insurance payments have climbed to $7,000 for his policy and his wife’s, more than double what they paid when they purchased the coverage in 2004. “We bought long-term care insurance with the idea that we weren’t going to be a burden to our loved ones. They baited me and got a hold of me to the point where it’s very financially difficult to abandon what I’ve spent.” “It’s a death spiral,” he added. “So why does the government allow companies to continue this charade, knowing full well they’ll keep raising the prices? Why doesn’t somebody call a halt to it?” Costs rising At its peak in 2008, long-term care insurance covered more than 112,000 people in Connecticut. Sales of those plans had climbed steadily for years, but in 2018, the numbers started to fall, and by 2023, 96,678 people had policies. Nationally, about 6 million people are covered by traditional long-term care insurance, though enrollment has been declining since 2013, analysts said. In 2000, there were more than 100 providers of these policies. In recent years, there are fewer than a dozen. While some people have dropped plans due to cost, enrollment also dipped during the pandemic because a number of policyholders died. When long-term care insurance was first introduced, it was marketed mainly to middle class and wealthy individuals, posing barriers from the beginning. But even for middle class families, maintaining these plans is becoming increasingly difficult. “The original price for long-term care was not based upon any type of insurance data. They were general population studies and nursing home longitudinal studies,” Paul Lombardo, director of the Connecticut insurance department’s life and health division, said at a public forum in 2020. “Unfortunately, a perfect storm was brewing with long-term care.” A combination of lower-than-expected interest rates and more people than anticipated holding onto their plans fueled problems, along with policyholders living longer and needing care for extended periods of time. “When this was priced 25, 30 years ago, you never anticipated somebody being in claim status for 10, 11, 12 years,” Lombardo said, referring to the number of years people are using their benefits. “It’s happening today.” Insurers had not counted on so many consumers maintaining their coverage. They assumed about 5% of consumers would drop their policies or default on payments, Lombardo said, but the reality has been about one half of 1% per year. All of those issues resulted in the push for annual premium increases. A CT Mirror analysis of rate hikes from January 2019 to October 2024 shows more than 17,000 people with long-term care policies have gotten hit with increases of 50% or more. Some of the biggest companies in the market, including Genworth Financial, Metropolitan Life Insurance Company and Transamerica Life Insurance Company, requested rate hikes for five years in a row beginning in 2019. When large providers seek premium increases, thousands of consumers can be impacted. In 2019, for example, Genworth requested a 40% rate hike on more than 9,000 Connecticut policyholders. In 2021, Transamerica requested a 20% rate increase on 8,000 policies. The Department of Insurance approved both requests with no changes. It’s a death spiral. So why does the government allow companies to continue this charade, knowing full well they’ll keep raising the prices? Kenneth Kollmeyer, Farmington In 2022, Genworth raised rates for more than 2,000 people by an average of 97%, with increases ranging from 79% to 173%, depending on the policy. The approved amounts were a slight reduction from the company’s original request. But some increases that affected fewer Connecticut consumers over the last five years were among the highest. For example, in 2020, Provident Life and Accident Insurance Company sought a rate hike on roughly 170 policyholders that resulted in increases ranging from 37% to 122%. In 2023, MedAmerica Insurance Company asked for a rate increase that left about 40 policyholders with a 174% premium hike. In reviewing rate requests, Mais said his department looks at market conduct — the insurance companies’ willingness to pay claims without hassle — and the solvency of the companies, or their ability to pay. Rates can’t be inadequate, unfairly discriminatory, or excessive — meaning there is a certain amount of benefit provided for every dollar spent. “Approving significant increases is never something we do lightly,” he said in an interview. “This is always the hardest part of the job, approving increases you know are going to make it more difficult for some people to continue with their coverage. But as insurance regulators, our primary duty is consumer protection.” Consumer affordability, however, is not a consideration in the rate review process. Rob Trafford and Adriana Falcón Trafford. Adriana took out a long-term care insurance policy in 2001. When she signed up for the plan, the annual premium was $2,608. Now, it’s close to $7,000. Credit: Shahrzad Rasekh / CT Mirror ‘It spoils your life’ Since mid-2018, the farthest back the Connecticut insurance department keeps records, the agency has received 769 consumer complaints about long-term care coverage, mostly about soaring premiums. In 2023 alone, 149 people submitted grievances. In interviews with the CT Mirror, policyholders, many of them older adults who have retired, described the pain of having to come up with additional money while living on fixed incomes. Several are agonizing over whether to drop their plans because they’ve already paid despite paying tens of thousands of dollars in premiums. Adriana Falcón Trafford, 90, paid $2,600 annually for her policy when she signed up in 2000. Twenty-five years later, she’s on the hook for more than $6,100 a year. “They sometimes want to double it right away,” she said. “Practically every two years, they try to increase it. It spoils your life.  “The longer you live, the fewer resources you have. If they want more money when you have less, it’s just impossible.” Frederick DiMella bought long-term care insurance 20 years ago. His annual costs have doubled in recent years. Credit: Shahrzad Rasekh / CT Mirror Frederick DiMella of Waterford has held onto his coverage for more than 20 years. Over the last two, the annual cost doubled to $2,600. DiMella wrote letters to his congressman, the insurance department, state lawmakers and the attorney general protesting the spiraling expense but said he received no response. “Everything is done either in the state’s favor or in the insurance companies’ favor and they just don’t care about the middle class,” said DiMella, 82. “Somewhere there has to be some accountability. Why have an insurance department that’s supposed to be protecting us when we’re getting 50% rate increases?” Cathleen Stark volunteered as a promoter for Connecticut’s long-term care insurance partnership plan, a joint program by the state and private industry that has sold policies to more than 60,000 people since its inception in 1992.  In the 1990s, Stark visited people’s homes to share the benefits of the coverage but now has misgivings about her efforts. “I feel they have changed the goalposts,” said Stark, 83, who has seen her own annual premiums jump to $9,200, up from $4,000 when she bought the coverage with her husband in 2005. This year, the cost is expected to rise to $10,500. “We’re in so deep, we’re just hoping they do not default,” she said. “We’re also carrying the weight of the increases.” Buy at your own risk In Connecticut, the Office of the Health Care Advocate and a special unit in the attorney general’s office help protect consumers who purchase health insurance. But there currently are no similar resources for long-term care insurance policyholders. Sean King, who until recently was the state’s acting health care advocate, said the office receives a handful of complaints from people with long-term care insurance each year. “When people reach out, the typical complaint is their insurance carrier is raising rates in a way that’s unsustainable,” King said. “Every once in a while, somebody will come to us with a denied claim.” The health care advocate’s office refers those grievances to the insurance department, which makes sure that rate increases match the amounts approved by state regulators and educates consumers on their options. Connecticut’s long-term care ombudsman and the attorney general’s health care unit also don’t intervene in long-term care insurance cases. Legislators could consider expanding the powers of the health care advocate’s office to include services for those policyholders, King said, though efforts would mostly focus on claim denials, since premium increases fall under the purview of the insurance department. Such a move would require a law change and the allocation of additional funds to the office, he said. Attorney General William Tong Credit: Shahrzad Rasekh / CT Mirror Officials in Attorney General William Tong’s office did not directly respond to questions about how their unit operates or why it doesn’t take on issues related to long-term care insurance. In response to questions, Tong issued this statement: “Our country has not figured out an affordable, workable solution for long-term care,” he said. “Long-term care insurance is a broken part of that broken system.”  Tong said it’s up to consumers to “carefully scrutinize” policies before buying them. Without state officials to advocate for them, policyholders have stepped up outreach. They submitted written testimony on a range of bills seeking to impose solutions. They lodged complaints and sent comments to the insurance department about rising premiums. Some wrote letters to Lamont and lawmakers. Long-term care insurance policy holder David Schwartzer believes the rate hikes are unfair. He is now paying $8,200 a year . Credit: Shahrzad Rasekh / CT Mirror David Schwartzer, a Newington resident who with his wife purchased a long-term care insurance policy and faced sizable premium increases, circulated a petition demanding “an end to unfair” rate hikes. “The LTCI crisis deeply affects elderly and vulnerable citizens, many of whom have invested their life savings into these policies,” noted Schwartzer, 70, who is now paying about $8,200 a year for the two plans. “It is past time for Connecticut officials to step in, hear our stories, and take firm action.” Geary Maher and his wife purchased policies in 1998. Since 2018, the couple’s spending on long-term care insurance has tripled to more than $3,000 annually and their provider, Brighthouse, is seeking another increase of 167% over the next three years. Maher, the former head of Connecticut’s Office of Fiscal Analysis, found other policyholders facing sizable premium increases and organized a group to testify at the state Capitol. “As they age, people are getting closer to when they are going to need the benefits and they’re having to take lesser benefits,” he said. “It’s almost like the rug has been pulled from underneath them.” But as policyholders get older, some are having a harder time advocating for themselves. “We’re seeing some advocates die out,” said Anwar, the co-chair of the Public Health Committee. “They were probably in their 50s or 60s when they bought the plans, so they may be in their 80s or 90s now.” That means more of those efforts are falling to their children or other loved ones, he said. Sen. Lesser, D-Middletown, and Comptroller Scanlon at the state Capitol on January 22, 2025. Credit: Shahrzad Rasekh / CT Mirror Few legislative fixes The troubled long-term care insurance industry has long been a focus for legislators in Connecticut, but reform has been slow. More than 50 bills have been raised over the last six years with the aim of providing relief to policyholders, giving residents a greater voice in the rate review process and boosting transparency around premium increases. At least three passed but offer limited benefits. Lawmakers have proposed tax incentives, caps on rate increases, public hearings, consumer notifications and a five-year phase-in for rate hikes (instead of three). Some even suggested launching an investigation of the insurance department’s rate review process. None of those bills succeeded. Legislators blamed a constellation of issues for the failures, from partisan gridlock to budget constraints. “This was the most vexing and complex policy challenge I looked at as co-chair of the Insurance Committee,” said Scanlon.. “I would have dozens of people come up to me every year and say, ‘My long-term care insurance premium has gone up by 200%, and it went up by 157% last year. It’s getting so expensive, I’m thinking about abandoning it.’” But finding the right solution proved difficult. Scanlon and his then-co-chair Sen. Matthew Lesser arranged calls with their counterparts in other states and consulted with the National Council of Insurance Legislators. “At the end of the day, what we found is that each state passing a hodgepodge of things was only going to make the problem worse — which is tipping the scales and having one of these companies go down,” Scanlon said. “Then everybody gets screwed.” Lesser said several of his constituents are enrolled in long-term care insurance plans. “I was under pressure to do something, and I still feel under pressure,” said Lesser, D-Middletown, who is now co-chair of the Human Services Committee but remains a member of the Insurance Committee. “I was having trouble finding policies from around the country that seemed to work. Some states instituted freezes on [rate hikes], and what we heard from the insurance department loud and clear was that it caused more problems than it solves.” Many consumer protection bills were met with sharp opposition from lobbyists for insurance companies, including caps on rate hikes, calls for public hearings and notifications to policyholders.  The lobbyists did, however, support measures to create a tax credit for policyholders. “I don’t think it’s in the consumers’ best interest to extend the period of time it takes to get products to the market,” said George, the president of the Insurance Association of Connecticut, when asked about opposition to public hearings. “You would be adding to the bureaucracy of how this process goes. You already have the department approving the rates. I don’t see how the benefit would balance out the delay.” On the issue of capping increases, George wrote in joint testimony with two other organizations: “Arbitrary restrictions … could undermine an insurer’s ability to effectively manage risks and jeopardize the financial well-being of companies.” In an interview, he added: “Insurance is one of the most highly regulated industries in the world, and we have a state-based regulatory system. While there’s a federal insurance office, all of our products, our policies and our rates are approved by the [state] Department of Insurance. So, the department is a partner here in terms of having these rates set.” Long-term care insurance wasn’t the only topic on which the Insurance Committee struggled to advance legislation. Last year, the group concluded its work without passing any of the dozens of bills it considered after disputes over a few proposals created deadlock. Sen. Jorge Cabrera , co-chair of the Insurance Committee, has tried - and failed - to pass meaningful long-term care insurance reform. Credit: Shahrzad Rasekh / CT Mirror Sen. Jorge Cabrera, D-Hamden, co-chair of the committee, said he has pushed long-term care insurance bills without success. One idea he recently favored would have provided a tax credit to policyholders when a premium increase surpassed 10%. “That didn’t go anywhere,” Cabrera said. “It was a non-starter because it cost too much and there were competing budget interests.” Weighing remedies A federal solution has been elusive. Congress passed the Community Living Assistance Services and Supports (CLASS) Act in 2010 to try to help people pay for elder care. The bill would have established a voluntary and public long-term care insurance program, but it was repealed in 2013 after the initiative was deemed too costly. Subsequent efforts have stalled. Meanwhile, some states are filling the void by launching their own programs. In Washington state, the legislature in 2019 passed a bill implementing a 0.58% payroll tax (58 cents per $100) to fund a long-term care insurance pool. This year, they voted to make the program portable, so people can keep the benefit even if they move out of Washington. Payroll deductions began last year. Starting in 2026, the program will offer eligible residents up to $36,500 (adjusted for inflation). While the amount falls short of what many people with complex conditions might need, supporters say the program could fund years of services as a supplement to informal care. “Long-term care is expensive, and you’re not going to have a high premium that addresses all of everyone’s needs. It’s rare in our country,” said Ben Veghte, director of Washington’s initiative, the WA Cares Fund. “We have a modest premium and a modest benefit. “It’s a middle class product. It’s for everyone.” At least 18 other states are considering a similar payroll tax to launch a long-term care insurance program. Legislators in Connecticut say they are open to the idea. “I would be very interested to look at it, because we haven’t been able to move the needle in a meaningful way,” Anwar said. He recommended the state first study what a similar program would look like here. Elder care experts also suggested creating programs for people who are older or have a disability but do not yet qualify for Medicaid. This could include counseling and case management services. “It would be helping them understand what options are available that they either are financially eligible for or could pay for themselves, that would help them stay in the community longer,” said Julie Robison, professor of medicine at the UConn Center on Aging. Anwar said he has not ruled out resurrecting legislation to put a cap on rate increases. “My argument was that if we have a moratorium for three or four years, we can at least protect our consumers while federal [officials] who are looking at this can get organized,” he said. Cabrera has suggested opening up the rate review process to greater scrutiny so the public can get a better understanding of why premiums keep climbing. “It’s so opaque. The information you get is oftentimes so vague, it’s hard to pin down,” he said. “Part of what I was advocating for in terms of insurance is to have a similar process as we do with energy, where we require the utility companies to come before us and explain how they arrived at these rates.” As lawmakers begin work this legislative session, residents with long-term care plans have renewed their calls for remedies. “I’m still searching for an answer,” Cabrera said. Shahrzad Rasekh / CT Mirror Credit: Shahrzad Rasekh / CT Mirror “Priced Out” is an investigation into the long-term care insurance industry and the challenges of paying for elder care in Connecticut. Do you have experience with long-term care insurance? Have you bought a policy, or do you sell insurance? We want to hear from you. Please get in touch with reporter Jenna Carlesso at [email protected]. PROJECT CREDITS Reporting: Jenna Carlesso, Dave Altimari, Katy Golvala, Andrew BrownPhotography: Shahrzad Rasekh, Rachel MolendaData visualization: Katy Golvala, Renata DaouEditing: Elizabeth Hamilton, Keila Torres Ocasio, Erica PhillipsSocial media: Gabby DeBenedictisWeb development: Renata Daou, Stacey Peters