Legislation that creates safeguards for long-term care insurance policyholders and requires greater financial disclosures from carriers won final passage in the Connecticut House late Tuesday, marking a significant step toward adding transparency to the industry.
The measure cleared the chamber with broad bipartisan support after just three minutes of discussion. Members voted 146-4 in favor.
The bill requires insurers to file annual reports with the state on incurred and actual paid losses for long-term care insurance policies issued in Connecticut. The state insurance commissioner and head of the governor’s budget office must share the information with legislators and post it on their departments’ websites.
It also gives the state attorney general the power to investigate insurance companies for practices or patterns that violate state law.
Additionally, the measure directs the insurance commissioner to study the effects of a proposal allowing policyholders to cancel their plans — and obtain full refunds for premiums paid since the start of the coverage — whenever an insurer files for rate hikes that exceed the rate of inflation. It also asks the commissioner to review the impact of the reinsurance market on the availability of long-term care insurance policies.
“We made a major step in the right direction,” said Jan Kritzman, 78, after watching the bill sail through the House. Kritzman’s long-term care coverage with her husband has risen to $7,000 a year, up from $2,000 when they purchased the plans in 2004.
“We just we want accountability. We want an answer to, ‘Why are you raising the rates?’ We will certainly keep an eye on how the Connecticut Insurance Department goes forth with this. Hopefully they will be on the side of the policyholders who are in dire need of help from oppressive, burdensome rate increases.”
Nearly 100,000 people in Connecticut 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.
A Connecticut Mirror investigation last year found that the annual cost of maintaining long-term care coverage has risen sharply for many residents due to miscalculations by insurers on how long people would live, the price of care and how many would need it. Policyholders complained of dramatic rate increases, often exceeding 50% and, for a few dozen people, as high as 174%, according to a CT Mirror analysis.
The CT Mirror’s review of rate hikes from January 2019 to October 2024 showed that more than 17,000 people with long-term care policies were had been 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 hikes for five years in a row beginning in 2019.
[Read all of CT Mirror’s coverage of the long-term care insurance industry here.]
When large providers seek premium increases, thousands of consumers can be affected. In 2019, for example, Genworth Financial 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 insurance department approved both requests with no changes.
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.
The long-term care insurance bill passed the Senate last week.
“This is a step forward that will hopefully provide some compensation, some sign to the people of this state that we care about this issue, that we are aware the market has failed the people who purchased these policies,” Sen. Matthew Lesser, D-Middletown, a key back of the measure, said during the debate.
The legislation now heads to Gov. Ned Lamont’s desk.
