The Florida Senate Banking and Insurance Committee recently approved legislation that would curb the cost of long term care insurance.
Hundreds of thousands of Americans buy these policies — usually when they are younger — expecting that if they require extended care in hospitals, rehabilitation centers, or nursing homes, their insurance will cover the cost.
But because rates can soar more than 200 percent during the 20 to 30-year life of the policies, said Rich Robleto, deputy commissioner for the Office of Insurance Regulation in Florida, seniors may be forced to cancel their policies, losing all the money they have invested.
The new bill would require that current policyholders’ rates be increased to no higher than the cost of any new policy. It would also provide current policyholders with the option of keeping premiums stable and taking a reduced package of benefits.
“Florida won’t be the only place where this happens,” said Bradley Ellis, a health care analyst with Fitch Ratings. “We’ve seen a lot of dramatic increases in these premiums. We are talking about a population that will need a lot of care, and the cost of that care is going up.”