Hartford Business Journal

www.HartfordBusiness.com • July 27, 2020 • Hartford Business Journal 19 on 4,900 policies. Several hundred of those policies would see their average annual premium rise above $19,000, if the filing is approved as is. Another pending filing, from John Hancock, requests a 68% increase on 7,150 policies. Those two filings combined, if ap- proved by CID, would increase writ- ten premiums by nearly $64 million on policies sold as far back as 1990. Under a 2014 state law, increases of 20% or higher must be spread out over three years. Since then, some lawmakers have pushed for a longer phase-in period, but without success. The policies are increasingly ex- pensive because long-term care is too. According to an annual cost survey by Genworth, a private room in a Connect- icut nursing home has a median annual cost of nearly $167,000, while a private room in an assisted-living facility has a median cost of $58,560 — an increase of about 40% each since 2008. Older policies tend to see the big- gest increases. Meantime, carriers are sell- ing fewer new policies as well. Long-term care insurance sales in Connecticut have steadily fallen, shrinking by dou- ble-digit percent- ages in seven of the last 10 years, and the number of insurers writing business here has also declined. In 2018, the most recent year for which data is available from the state, the number of policies sold fell 13% to a new low of 1,846, down from 8,571 policies sold in 2008. Private long-term care insurance tends to be purchased by higher earn- ers who want to preserve an estate for their heirs when they die; or by people who want richer benefits than Medicaid offers, or to avoid shouldering out-of- pocket care costs when the time comes. There were 106,000 Connecticut- sold policies in force as of 2018. Long-term care insurance com- prised just 4% of the $235 billion worth of total long-term care spend- ing in the United States in 2018, according to AARP. Medicaid and out-of-pocket spending were the two largest spending segments. Will COVID-19 affect long-term care premiums? While the pandemic hasn't yet played a role in insurer rate requests in Connecticut, it may in the future. One morbid reality of long-term care insurance is that it can be less expensive for the insurer if a policy- holder dies earlier. The shock of deaths in nursing homes and other facilities across the country in recent months could therefore be a financial positive for insurers, according to an April report from the actuarial firm Mil- liman, which said insurers' future cash outflows could decline by up to 10.5%, depending on their customer mix, and other factors. There is still much uncertainty about many of those factors, the authors wrote. However, lower interest rates — which have created financial struggles for long-term care insur- ers for years, and have been cut even further during the pandemic — could quickly swamp any financial benefit, the report said. Long-term care policies sold in CT Source: Office of Policy and Management 0 3,000 6,000 9,000 12,000 15,000 Policies sold 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Paul Lombardo, Life and Health Division Director, Connecticut Insurance Department UNCOVERING GREAT IDEAS FOR MORE INFO >> HARTFORDBUSINESS.COM/HBJ-EVENTS CLICK ON 90 IDEAS IN 90 MINUTES & REGISTER TODAY! JOIN OUR FREE WEBINAR AUGUST 6TH 8:30 AM TO 10:00 AM COLEMAN LEVY, Consultant/Advisor, Coleman B. Levy LLC (He is the former: Partner, Hinckley Allen; Founder and Chairman, Levy & Droney PC; Co- owner New Britain Rock Cats) ERIC CAVOLI, Partner, SVP, Group Creative Director, CashmanKatz DANA NEVES, Vice President & General Manager, WFSB BETH SHLUGER, CEO & President, Hartford Marathon Foundation CHEF TYLER ANDERSON, Millwright's Restaurant and Tavern CARLOS MOUTA, Hartford Developer CLAUDIA REUTER, Managing Director, Stanley+Techstars Accelerator JAY WILLIAMS, President, Hartford Foundation for Public Giving JENNIFER DELMONICO, Managing Partner, Murtha Cullina GOLD SPONSORS: SILVER SPONSORS:

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