Hartford Business Journal

14 Hartford Business Journal • March 12, 2018 • www.HartfordBusiness.com By Matt Pilon mpilon@HartfordBusiness.com W hen Dr. Milton Wal- lack and his wife Joan bought long- term care insur- ance in 1995, they thought it was a smart financial move. "We knew that you could get wiped out," by nursing home or other long- term care costs, said Milton Wallack, a retired periodontist who was in his 50s when he bought the coverage. While the price tag on that Travelers policy wasn't cheap when the Branford couple bought it — just shy of $5,000 in annual premiums — their insur- ance agent told them the price was unlikely to rise in the future. For years, she was right. But in 2011, when MetLife acquired the policy, the Wallacks say their annual premium jumped 39 percent. Another 20 percent hike came in 2014, and 10 percent more in 2015. Those double-digit rate hikes haven't stopped since, even after their policy changed hands again last year, when MetLife spun out an independent com- pany called Brighthouse Financial. Soon, the Wallacks — who say they've shelled out more than $156,000 in premium payments since they purchased their policy — will be required to pay a combined annual premium of nearly $12,400, or they will lose their policy. The increases "border on outra- geous," Milton Wallack said. The couple's experience isn't unique. They are two of many Connecticut residents who bought long-term care insurance during a 1990s industry boom, only to see the costs of those plans skyrocket in recent years. Over the past decade or so, insurers that sold or acquired many long-term care policies, which help pay for things like nursing home, assisted-living or homecare services, have asked for large premium hikes, particularly older plans no longer being peddled to consumers. Many insurers have said they made faulty assumptions years ago about the cost of care, interest rates, policy- holder lifespans, retention rates and other fac- tors, all of which led them to price policies too cheaply. As premiums have steadily increased, sales of long-term care insurance have plummeted in Connecticut and nationwide. At the same time, the number of insurers offering such plans in the state has been cut in half since 2005. State lawmakers are trying to step in with a bill that was recently pro- posed in the Insurance and Real Estate Committee, which would spread out large premium increases over a longer period than is currently required. Insurers, which argue their rate increases are actuarially justified and allowed by law, say phased-in increas- es could hurt carriers' solvency and ability to pay claims. The Connecticut Insurance Department (CID) says it's concerned by rate increases, but agrees the bill could hurt insurers' financial health and ultimately lead to larger future rate hikes. Milton Wallack, who in 2003 found- ed the Connecticut Stem Cell Coali- tion, a group that successfully pushed for the creation of the state's embry- onic stem cell research program, said he and his wife have just a few choices: Continue to pay the higher rates, switch to a lower-benefit plan to blunt the increases, or lose coverage. They've opted for the first op- tion, despite the increasing financial burden. Their desire to stay insured has been buttressed by the experi- ence of an extended family member who recently developed dementia and moved into an assisted-living facility, which has been covered by a long- Senior Care Crunch High premiums slow long-term care insurance sales to a trickle Jesse Slome, Executive Director, American Association for Long-Term Care Insurance Dr. Milton Wallack and his wife Joan Wallack asked lawmakers this month to support legislation that would spread out long-term care insurance premium hikes. The Branford couple said their annual premiums have increased about 150 percent since 2011. HBJ PHOTO | MATT PILON

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