Around 8,300 Ohioans were affected by the rate increase
Home, auto insurance premiums skyrocket
Experts say inflation is a major factor.
Fox – LA
MetLife customers in Ohio saw a 144% increase in their annual premiums for long-term care insurance, according to a letter the insurance company sent policyholders in July.
The rate increase affected around 8,300 Ohioans, said Judi Mahaney, a spokesperson for the insurance company.
It’s the latest development in a troubled private insurance market that has fallen short in providing financial assistance to millions of older Americans who need home health aides or assisted living to survive, according to KFF Health News.
MetLife wouldn’t be specific about why it raised its premiums, but experts say part of the problem is that companies offering long-term care insurance didn’t account for the longer life expectancies of those needing long-term care and miscalculated premiums as a result.
“Products sold in the past were ridiculously underpriced, and that’s caught up to the carriers,” Kerry Peabody, a long-term care expert, told the Portland Press Herald last year, when MetLife customers in Maine saw the premium increases that Ohioans are now facing.
For 71-year-old David Ginsburg, the premium increase translates to roughly $4,700 a year, more than twice the $1,900 he paid last year.
“This is quite a jolt for most seniors,” said Ginsburg, a partially retired Cincinnatian who led Downtown Cincinnati Inc. as president and CEO from 1994 to 2018.
Ginsburg and his wife bought the insurance in their 50s, he said, because buying long-term care insurance earlier usually yields cheaper rates.
While the letter he received from MetLife guarantees that he won’t face additional increases in his premium, he said it’s the largest year-to-year increase that he’s seen since first enrolling in the insurance 20 years ago.
“In the past, premiums have increased gradually by 3 to 5% per year,” Ginsburg said, adding that those hikes usually resulted in increases of hundreds, rather than thousands, of dollars. “It just seems so excessive.”
Along with his wife, who has her own long-term care insurance, the couple will pay a combined $8,000 a year starting September.
Ginsburg said that his family’s fortunate enough to be able to foot the bill but is worried for seniors who cannot.
“It seems excessive and wrong,” he said.
Why did the premium increase?
Judi Mahaney, the spokesperson for MetLife, said that the premium increases are due to challenges faced by the entire long-term care insurance industry.
The premium increases were approved by the Ohio Department of Insurance, the state agency that regulates insurance companies, according to the letter MetLife sent to customers.
The Enquirer reached out to the Ohio Department of Insurance to ask why the department approved this steep increase.
Robert Denhard, a representative from the Ohio Department of Insurance, declined to answer specific questions, instead directing customers to the department’s Consumer Services Division to file a complaint.
Ginsburg says he’s disappointed by the department’s lack of clarity.
“As a taxpayer, I do not feel well-served by the state of Ohio,” he said.
Thousands of elderly Americans survive on under $2,000 a month
Long-term care insurance helps defray caregiving costs for elderly Americans who need assistance with daily tasks such bathing, dressing or eating.
In theory, it covers services that range from nursing home stays to having an in-home aide, both of which can be very expensive.
Long-term care insurance is crucial for many Americans to be able to access these caregiving services; however, MetLife’s premium hikes may make the insurance unaffordable.
Forty percent of older Americans live off of Social Security payments alone, according to a 2020 report from the National Institute on Retirement Security.
This translated to thousands of elderly Americans surviving off of roughly $1,500 a month, the average monthly Social Security benefit in 2020.
