CID: Long-Term Care Rate Filing - MedAmerica Insurance Co. (Individual-CT Partnership)

Long-Term Care Rate Filing - MedAmerica Insurance Co. (Individual-CT Partnership)

Rate request: 147 percent average increase

Decision: Disapproved, limited to a 30 percent increase on June 27, 2017

On April 5, 2017, MedAmerica Insurance Company requested an average increase of 147 percent for individual long-term care plans. The plans were sold in Connecticut from 2003 to 2012 and are no longer being marketed.

There are 630 policies currently in effect in Connecticut. These policies have been approved by the Connecticut Partnership for Long-Term Care, a private/public alliance that helps policyholders protect their assets.

The company said in its filing that the increase was needed because of higher than expected claims costs and a longer duration of paying those claims that was anticipated when this product was originally priced. It also noted that the interest it is receiving on its investments earmarked to pay for future claims is lower than expected.

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 experience on this block of business in Connecticut is better than expected, it has begun to deteriorate over the last two years. Looking at the market experience on a nationwide basis, the Department noted it performing worse than expected and the nationwide data is more credible than the smaller Connecticut market. As a result, the Department disapproved the initial increase request and limited the increase to 30 percent.

The company noted it would offer its customers options to reduce or change benefits to offset the impact of an increase. Under Connecticut law, increases of 20 percent or higher must be phased in over three or more years. This increase would be phased in at 10 percent a year over the next three years.


Find the filing documents here at Long-Term Care Insurance Rate Filing

Content Last Modified on 6/28/2017 3:24:39 PM