Long-Term Care Rate Filing - MedAmerica Insurance Co. (Individual 2004-2007)
On August 21, 2018, MedAmerica Insurance Company requested an average increase of 83.8 percent for individual long-term care plans. The plans were sold in Connecticut from 2004 to 2007 and are no longer being marketed.
There are approximately 90 policies currently in effect in Connecticut.
The company said in its filing that the increase is needed because of “adverse experience” on this block of business. The company said there have higher than expected claims costs and a longer duration of paying those claims than was anticipated when this product was originally priced.
Unlike medical health insurance with premiums set to cover expenses incurred only during the upcoming policy year, long term care premiums are set to cover expenses that are not expected to occur until a distant date, sometimes 20 years in the future.
After an actuarial review, the Department determined that while the experience in Connecticut has been worse than expected, it relates only to a single calendar year – 2005. Since then there has been practically no claims on this closed block of business. As a result, the Department disapproved the initial rate increase request and instead limited it an increase of 15 percent on October 1, 2018.
The new rates take effect after the company has given its customers 60 days’ notice.