CalPERS' Ailing Long-Term Care Plan
Editor’s note: A new article on this controversy, published Feb. 20, 2013, is here. It concerns the recent 85 percent rate hike.
SEPT. 16, 2010
By ANTHONY PIGNATARO
For a long-term care benefit plan, the news has mostly been bad. Last year saw a huge budget deficit of more than $800 million, the biggest since 2007. Eight of the last 10 years have been in the red. The plan’s investment portfolio lost 16.2 percent of its value last year; over the previous five years, it’s grown an anemic 1.9 percent. It’s been more than two years since people could join. Though there have been three big rate hikes since 2003 – the most recent, in 2009, was 22 percent – operating revenues have either stagnated or dropped.
Beyond that, not much is known. That’s because the benefit plan in question is run by the California Public Employees’ Retirement System (CalPERS), and it’s not subject to any substantial public oversight. In fact – and unlike private insurance plans operated in other states by companies like John Hancock or Met Life – the CalPERS long-term care benefit program is not regulated by the state Department of Insurance.
“We’re self-insured, so there’s no oversight, just as if you were self-insured,” said Bill Madison, a CalPERS spokesman. Madison compared CalPERS’ long-term care benefit to a driver who posts a bond to satisfy the state’s auto-insurance requirement. “He’s self-insured, and there’s no oversight of him.”
California is the only state in the U.S. that has gone the self-funded route for its public employee long-term care benefit plan. And that makes some officials very nervous.
“You can do whatever you want when you don’t have oversight,” said one state official who requested anonymity because he’s not authorized to speak about CalPERS. “Oversight has a cost, and they probably thought that getting rid of it meant they could deliver services cheaper. But that hasn’t been the case.”
The long-term care benefit dates to January 1995. “Long-term care is fast emerging as a critical need for our members,” then-CalPERS Board President Dr. William D. Crist said at the time. “Our attempt is to offer members the most cost-effective, high-quality plan possible at the lowest premiums.”
It was a laudable goal, but CalPERS went about it in a strange way. “This all came from legislation signed by Gov. Pete Wilson,” said one California insurance company official familiar with the CalPERS benefit program. “It was a breakthrough – a very consumer-friendly policy. No other state had this. It was revolutionary.”
CalPERS offered three benefit plans. The Comprehensive Plan provides for adult day care, home care, assisted living facilities and nursing homes with a one-time 90-day deductible period. The Facilities-Only Plan was similar to the Comprehensive Plan except that it lacked home and community-based care. The last, the Partnership Plan, offered home care, adult day care, assisted living facilities and nursing homes with a one-time 30-day deductible. There’s also optional inflation protection and the benefit is “fully portable.”
What’s more, the program was open to “all California public employees, retirees, their spouses, parents, parents-in-law, and adult siblings” aged 18-79 (same-sex spouses aren’t eligible, and there’s a class action lawsuit on that very subject pending in U.S. District Court in San Francisco). To receive benefits, a person “must be unable to perform any two activities of daily living – for example, eating, bathing or dressing – without help, or have a severe cognitive impairment,” states a 2008 CalPERS press release.
The latest figures from CalPERS show that the long-term care program has 165,023 enrolled members, making it one of the largest such benefits in the nation. But for a program that survives on recruiting new policy holders, it’s odd that CalPERS hasn’t had an open application period since June 2008.
“In 2009 and 2010 the board didn’t establish one because it wanted to make sure the fund was self-sufficient,” Madison said. “They wanted to keep things at a level they could support those who are insured.” Madison added that the “stability of the fund” was the board’s highest priority.
Whereas most states put such a benefit program out for bid with the big insurance companies, California rejected the bids it solicited and decided to run the program in-house. Doing so meant the state insurance commissioner would have no say in how the program operated.
CalPERS sold the plan to prospective customers as a consumer-friendly choice: “Because there is no insurance company involved and because of the size of the CalPERS purchasing pool, the premiums for the long-term care insurance program will be 20 percent to 25 percent less than a comparable program offered by an insurance company,” stated a July 14, 1994 CalPERS press release.
But it didn’t work out that way. For reasons that aren’t clearly stated in CalPERS’ publicly available financial statements (the long-term care benefit appears on just six of the 2009 CalPERS Comprehensive Annual Financial Report’s 198 pages), the benefit in the last few years has accumulated sky-rocketing claims, massive investment losses and ballooning deficits, even in the face of three large premium hikes.
The most recent program deficit is so large that even the CalPERS annual report can’t gloss over it.
“The unrestricted net deficits of the Long-Term Care Program increased by $676.9 million to $811.6 million during the 2009 fiscal year primarily as a result of the increase in the long-term estimated liability and the unfavorable fiscal year 2008-09 investment experience,” states the report. “The fund’s management is evaluating the results to determine if additional mitigating action is necessary.”
That “additional mitigating action” turned out to be a substantial rate hike. CalPERS previously instituted rate hikes in 2003 and 2006, but the long-term care fund’s 10-year review included in the annual report shows the resulting revenue growth from the hikes did little to offset the already considerable budget deficits. “We’ve had a few rate increases,” CalPERS’ Madison said, “but our rates are still competitive.”
A 17 percent hike in 2003 seemed to work, raising operating revenues from $186.6 million to $200.9 million, which helped turn 2002’s $261.8 million budget deficit into a $20.3 million surplus. But that was the last year CalPERS’ long-term benefit was in the black.
In 2006, a 33 percent rate hike translated into barely $2 million more in operating revenue which did nothing to help with the year’s ending $771.5 million deficit. Three years later, a 22 percent rate hike hit all policies issued prior to 2005 (those applying 2005 received a 15 percent hike).
“This premium increase comes during economic hard times for many of our members and their families and, at the same time, we have an obligation to our members using and needing this coverage to maintain this program’s stability,” CalPERS Board of Administration President Rob Feckner said in a Dec. 16, 2009 statement. How that rate hike affected the fund’s balance sheet is unknown, but the 2009 annual report shows that the long-term benefit fund was having an exceptionally bad shape that year, with revenue nearly $3 million less than the previous year and a budget $800 million in the red.
Claims are at least part of the reason for the massive deficits. Since 2000, claims increased by an order of magnitude, from $10.6 million to $116.2 million in 2009.
Investment income over the same period has also been volatile. The best year was 2007, which $281.1 million in revenue, but that was erased by 2009, which saw $369 million in losses. The annual report blames this on “poorly performing equity markets.” A fund breakdown shows 18.3 percent of the fund is in international stocks, 28 percent in domestic stocks, 48.8 percent in domestic debt securities (mortgage debt and so forth) and the remaining 4.9 percent in real estate.
“That’s pretty volatile,” said the insurance company official. “They shouldn’t even be in equity. And that $800 million deficit – how do they survive that? Is there no way to do an audit of them? If they had to put their finances on the table for scrutiny like any other insurance company, what would their rating be? I’ve got a bad feeling that this is a ticking time bomb.”
Photo of CalPERS headquarters courtesy of CalPERS.
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Until we require action by NAMED elected officials to fix this mess, or else they do not get our endorsements, forget about it. Nothing is going to change until it blows up.
It is time to start naming names, one at a time.
Seems like it is time to change the rules about the management of CalPERS. The CEO of a public company would have been let go – long ago. Since the state of CA is the #1 source of new funds, there is no reason that the money should not have some strings attached.
Accountability in government is not a bad thing. Only those who would be exposed will be against it. It sounds like it is time to get some adults in charge.
There needs to be a class-action suit holding CalPERS accountable. Check Goyette and Associates, Attorneys as Law’s blog on CalPERS Long Term Care Insurance. I spoke with the firm’s representative on the blog and unfortunately, this is not the sort of law that they practice so they most likely will not pursue it. We need to find a law firm that is up to doing this,
I have been in the program almost since its inception and have seen my rates almost quadruple since I started. Unfortunately, I have paid a lot into this program and feel I need to get out. Due to my increased age, it is likely I cannot afford to get insurance.
A person named W. Grimes who posted on the Goyette blog says that he/she has all the promotional literature that clearly shows that CalPERS has been very dishonest with its members. At a minimum, those earlier members who have the most into the system should be grandfathered and their rates should reflect what was promised. Apparently other LTC insurers have done this and it is only fair.
My mother has paid many years of high premiums into this account and now, when meeting ALL of the requirements for disability for long term care, she cannot get any reimbusements, they keep asking for more paperwork, etc. It is an outrage.
J. Lebsack, sorry about your mother’s situation. This is another reason why one should stay away from everything that is State run. The powers that be just do not know what they are doing.
Yeah right,
All the long term care insurance companies have the
same trading practices. All of them have the same
attitude towards the middle class workers. Raise the
premiums and suck the lifeblood out of us. Just
like everything else. The cost of things goes up but your
paycheck doesn’t. That is why the rich get richer and the
middle class get screwed. Pure greed.
Should I just cut my loses and stop paying for this CalPers long term insurance. I am 68 years old and have paid in about $13,000. I don’t want to pay for the next 10 or 20 years and not have any coverage when I need it. I am paying about $1500 a year. We know that amount will go up and the coverage will shrink. Anyone out there feel the same way as I do or have already stopped paying?
I am almost in an identical situation. And, just today I called CalPers Long Term Care and told them I am canceling my coverage. They said it had to be in writing. It went in the mail today!
From Mary Arthur:
This situation of CalPers selling us LTC insurance with inflation proofing that is never given, guaranteed premiums that they told us historically were not raised nor ever would be – now with steadily increasing premiums in a time of economic hardship is clearly an issue that needs to be addressed as elder abuse in a class action lawsuit. Why we can’t find an attorney to take this on? Is it possible that the reason must be because CalPers can afford to use extensive money to hire the best and fight the longest and it simply seems that attorneys cannot afford the financial risk to fight CalPers?? Does anyone know an attorney who can help us as this situation is serious and we depended on CalPers for years and now what do we do??? Since we are all in the same situation as senior citizens. Is there any chance at all to fight this issue and this agency help us by finding a way to examine this further and by locating someone in the state to examine this issue for us. Most of us simply do not know what to do and it seems Martha above has said what we all feel but we all feel stuck and do not know what to do after paying all this money individually and in some cases as couples.
Please help us further with the situation – we simply cannot seem to locate anyone to represent us and most of us have been looking at this issue for over a year if you read the postings online.
I am not a client of Cal Pers, but i work for one. I am on the other side of the fence and as a independent provider i believe that the longterm care system is a mess. As an “IP” i was prompted to fill out the ip package along with the assignment of benefits, which will give Cal Pers approval from the client to pay the independent provider directly for services rendered. Well that was faxed mid feburary and i ve been working ever since. They denied the first three claims submitted stating i did not have a assignment of benefits on file. After calling for days and even weeks on end they found there error and expedited two weeks of payments for march.6th-20th, which was fed-exed to my home and received on the 23rd. the chk for Feb.25-26 was received march.29th. I have not received anymore payments and they failed to pay me for Feb.27th-Mar.5th which i called on 4/4/2011. Can u believe it they denied the claim for the same exact error they made earlier what is it going to take for their employees to pay better attention to important docs. I and my client are now going thru hardships with my finances and her health. Corry from Cal Pers reassured me that i would get a call back today 4/8/2011 in regards to all these errors but they have failed again, and there was no chk in the mail, no comformation for direct deposit or issuance of the chk from feburary. This is not fair in any way and me and my client believe justice will be served.
I’ve been in CalPers for 14 years and my husband has been in for 10. Both of our premiums have tripled since we joined. First in 2001 due to “down turns in the stock market” and then every 2 years or so. They even went up in 2007 when the stock market was booming, so clearly the stock market is not the culprit. There is no way we can get our money back unless we die before age 75. We are also talking about cutting our losses and getting out. We’ll take our chances-especially after reading all the posts about claims being refused etc.. I am really sorry I was suckered in. I thought I was doing the responsible thing. My fear is that the costs will become so astronomical that we will no longer be able to afford the premiums and we’ll really have been screwed. Something is wrong here. They need to be investigated by consumer protection. Maybe Joel Grover of NBC would be interested in exposing them. Since our representatives are useless (I’ve written and complained) I would be more than open to joining a class action lawsuit. Maybe we could get one going…
I just received another notice of a 5% premium increase that will take effect July 1, 2011 unless I contact them and choose another option before then. I have been calling them for the last three days, but I can only get a recording saying that they can’t take my call due to extremely heavy call volume, and I should try again later. This kind of behavior on their part only increases my feelings that something is wrong. Despite have paid into the program for 15 years, I feel that it is time to cut the losses. If there were ever a class action suit won against them, I feel we would only gain “pennies on the dollar” winnings.
Tell your employee association or union to go to this website: http://www.caltc.net to see what other agencies and unions are doing about the CalPERS long-term care program.
Like Ann, my wife and I have been members 14 years. CalPers LTC representatives came to the County of Ventura, CA and made a pitch to over a hundred people the day I was there. Their reps. told attendees that if they selected the “inflation protection benefit option” that the LTC purchaser would never see an increase in the premium because of choosing this high option. I didn’t quite believe it so, like a many others, I waited till the question and answer period to double check them on this never an increase issue. The reps. insisted this was factual, so I took the forms home and immediately enrolled my wife and I. Now, combined, we have $35K tied up in this program with our monthly premium rate now almost tripled. We feel victimized, and now program administrators appear to be trying to smooth over previous administrators huge mismanagement errors by offering benefit period changes which would of limit their liability and substantially penalize members.
Like others, we ponder whether based on our premium history, whether we will be able to even afford the premium in a few short years since our annuity structured pension has no cost of living increase provision. Had I known that the CalPers LTC program was just another Ponzi scheme that was just too good to be true…but we placed our trust in Calpers. They can hardly claim ignorance since they had adequate resources to do the proper due diligence research before offering such a program to their members and others. No wonder the American people are losing all respect for their elected representatives. A sad outcome only accentuated by a less than honest CalPers program that apparently without honest checks and balances of Board actions.
Reading these posts and those at http://blog.goyetteassociates.com/?p=126
is so depressing as evidently we have all been take for a ride and there doesn’t seem to be any legal interest or activity toward a much deserved class action suit.
As a 76 year old single woman, with a small CalPers pension and a severely dwidling investment “portfolio” I am very insecure about my future and can no longer afford to continue paying the ever rising premisum for the CalPers LTC “inflation protected” policy that I have been paying since July 1996.
Where can we look for help? What can we do? Who is watching the store?
I am a long time member of the CalPERS Long-Term Care Program and have, like all of you, stuck it out through the rate increases because of the money I have already invested. I have reently been trying to get updated information on the status of the investment fund, relevant Board actions and any investifations that have taken place (as with CalPERS). So far, I have gone through the CalPers web site to no avail, contacted the 1-800 982 1776 number – they know nothing, been referred to the administration telephone numbers in Sacramento and get nothing buy voice mails, etc… Can anyone of you please tell me how to get current information about the status of this program?
I’m ready for a class action suit too! They told us we could avoid this latest premium hike if we were willing to forego inflation protection, so I wrote them that I would do that. THEN they told me that the result of doing that would be to slash my benefits by 45%. When I asked why that had not been revealed when the option was offered us, one telephone representative said, “They don’t like to put too much in writing”! Yet another telephone rep said, “It was in your contract that if you dropped inflation protection, your benefits would go back to your “base rate”. After re-reading my contract and NOT finding this there, I called yet a third time. This rep acknowledged it was not in the contact but said they just do this anyway. I’m going to include my e-address here because I want to hear from others who are ready to file a class action suit.
Ooops! I said I’d include my e-address and didn’t! It’s [email protected]
Dear Joan,
I am also furious with Calpers. I no longer have insurance with them because they are too expensive and I have had a very bad experience, I’m involved in an appeal of their claiming I owe them over three thousand for Kaiser insurance which I cancelled at the time of my retirement.
It’s a long story of at least 40 hours on the phone with Calpers, stress, outrage, waiting etc. etc. etc.
They are creating a lot of anger, outrage, and frustration in my otherwise blissful retirement.
I thought I was e-mailing Joan. I’ve never blogged before.
Anyway, I would certainly join a class-action suit against Calpers–this sounds like another Enron–I couldn’t believe those high-rises on J and K Streets in Sacramento.
I’m calling two attorneys today and see what is involved. My e-mail is:[email protected]
Thank you to everyone who has posted a blog! After talking to the CalPers LTC reps. and having difficulty getting information about the different coverage options, I decided to check the Internet for LTC policies in general. What
a disturbing and depressing discovery to find out about the possible insolvency, especially after having had the policy since its inception and believing that I could depend on it! I still have my STRS Bulletin from Winter 1994 that strongly recommended the purchase of LTC insurance. I feel that STRS also carries responsibility in that there has been no information, that I know of, that has been given its members regarding lack of oversight re. CalPers LTC policies, etc. I called CalPers to try to get a written statement of its financial stability and was given a number that cycled me back to the customer reps. who “had no information” beyond giving me the address of the CalPers Website! I am seriously considering discontinuing the insurance, despite the fact that this will leave me with no LTC insurance as I cannot afford the premiums which would be based on my present age. This situation is egregious for all those who have policies and expect to have financial help when it will most be needed. I would definitely be willing to be part of a class action law suit.
I count 12 people on this blog ready to participate in a class action lawsuit against CalPERS. Me too. Please get in touch with me at [email protected]
Im retired from the COunty of San Diego, single, and sinking over $200 per month into CalPERS LTC and am fearful of not being able to afford other things I need now because of the premiums and then not getting the care Im paying for in the future. Please keep me posted on your progress. THANK YOU for spearheading this.
Pat
My understanding was that CALPERS would cover both IADL and ADL needs as long as they were based on some underlying medical conditions. Now CALPERS wants to negate its responsibilities for IADL coverage. If this is the case, we should file a class action lawsuit to get all the money we have paid into CALPERS.
Where are class action lawsuit lawyers who could go after CALPERS Long Term Care for its bad faith insurance practices? Please let me know at [email protected].
It has been very informative reading all the comments above. I have just started to research my parents calpers policies and came upon this article. Very disturbing to say the least but I have to say not unexpected. I recently watched an internet program, hosted by Max Keiser and Stacey Herbert. I found the program to be very informative and after what I have just read, right on the money trail. He talks specifically about calpers, and doesn’t pull any punches. If you watch more of “The Keiser Report” you may start to see a pattern that makes sense. Look for episode http://www.youtube.com/watch?v=JP5Hs6cj7M0 there is much more about calpers on the Max Keiser Report. I have yet to contact my parents calpers representative about a recent invoice and would appreciate any input.
One more thing, has anyone called Erin Brockovich? She was doing a class action in Perth Western Australia against ALCOA. She might very well be interested.
http://articles.latimes.com/2011/jun/28/business/la-fi-calpers-khinda-20110628
My husband and I were long time members of CalPERS until this September when I received a letter from Juline Diers the Director of Customer Service terminating my coverage in the CalPERS Long-Term Care Program due to non-payment of premiums for the period of July through October. By the way, I am paid tenthly and CalPers payments were automatically deducted from my pay check at the time of enrollment in the program. The pattern was the same, at the end of the summer I would get a letter from CalPERS letting me know that payment for the summer months was due. Payments were made. The CalPERS representative and the favorable endorsement of STRS made the program seem an ideal way of ensuring that our children would not be burdened with our long-term health care issues. Like many of you, my husband and I feel we were misled from the beginning. We asked the same questions as Lorenzo and got the same answers. We enrolled in CalPERS Long-Term Care thinking we were investing in a health care program that would be affordable, reliable, and protected from inflation. It is interesting that when the rates were raised we were told to discard the old information and replace it with the new. Vague as it was I wish I had kept all the paper work. Perhaps 60 Minutes would be interested in exposing the fallacies. Looking on the bright side, Juline may have done us a favor.
My uncle had an open claim after recovering from surgery and needed to change facilities. I had previously sent 3 emails regarding the claim and received no response, so I tried them on their website. I received an automated response that I would receive a reply in 10 days. I called the main customer service number and was on hold for 1 hour without speaking to a human before my call was disconnected. I tried the local assistance number and the message indicated a wait time of 2 hours and 50 minutes. I tried calling their partner company Univita Health three times: 1) I was transferred into the same queue that I was holding on for 6 minutes already. 2) Called back and was put on indefinite hold. 3) Called again and after holding for 10 minutes the call was disconnected. 4) I finally received a person who could give me the information I needed. With the unemployment rate s it is, I am sure there a re lots of competent call center people out there who would love a job!
My mother and I both have CalPers long term care insurance. We have had it since the beginning of the program which is now 16 years. That’s alot of premiums paid in. I’m contemplating quitting the program, but my Mom who is 86 years old is not likely to get insured at the same current price. She currently has a claim in which was approved about two weeks ago. I was told that claims take ten days to approve. We have sent in the direct deposit information and waited the proper amount of time. Now, we’re going on twenty business days waiting to receive the moneys that we have submitted for claim. I’ve been told that a supervisor will call me back. Something tells me that this isn’t likely to happen soon. Has anyone else had similar problems with getting their approved claims paid???
I understand your frustration with claim issues Joyce. My parents bought lifetime, comprehensive policies in 1996 and they are 93 and 94 years old now, on a fixed income and have managed to endure all of the rate hikes. Now, after my dad fell and fractured his pelvis, CalPers strung me along from April 2015 to December 2015, sending me notices that they needed information that I had already sent them and that they were unable to approve the claim until they received the info requested. I sent everything again and again and have been paying a 24 hr in home caregiver since April with zero reimbursement. I received a notice in December that they have closed the claim and sent me a statement for premiums retroactive back to April and said if this would cause a financial hardship, we might want to consider a change in benefits to reduce premiums, which I have continuously declined because my folks bought the lifetime policies for a reason, and because they wanted the option to be cared for in their home. This is elder abuse, bad faith and fraud and to receive another offer to opt a benefit reduction before the remainder of the 85% premium increase is auto deducted in 2016 was an insult to my intelligence and makes me nauseous everytime I have to assure my dad that everything is taken care of. If he had the mental capacity to understand any of this, or thought that this plan he bought for he and mom was a scam from the beginning, he wouldn’t take another breath. Hang in there. Judgment day is coming.
So sorry to hear of all these issues. I would recommend contacting http://www.cahealthadvocates.org/ and see if they can coordinate complaints and get some action on them. Unfortunately, CalPERS was never an official “insurance” in the first place, so was allowed to do as wished. I have spoken to teachers already diagnosed w/ MS who say they were able to get the CalPERS policy in the early years. Laudable, but not a good business model with the long tail of claims predicted for 70% of folks over 65 one day. For those of you w/ longstanding policies, do the math. If you got the inflation rider, the number of days of care even years from now should pay all your premium within a few months when needed. If premiums are too high and unsustainable, downsize first on length of coverage–say unlimited to the 3 yr option. The only other moving part is the inflation, and that is why they are doing the increases. If you bought $120 a day–15 years later, that is now $240 and will be $480 in 15 more yrs. Cost for care is definitely going up 5% annually, so consider carefully whether to drop back down to the original benefit. With good monthly income, it may still work if you can make up that difference. More disturbing is the customer service issue. CANHR is a group of legal advocates who may be able to help. Consumer Hotline: (800) 474-1116 http://www.canhr.org
Joyce-once the claim is rolling, I believe your mother’s premium will be waived as long as she is on claim. Depending on your age and health, you may or may not be well advised to switch to other coverage. You will definitely want to speak with someone who specializes in this coverage to get the best advice. Never drop your LTC coverage until you have been approved for a replacement policy. Revisit why you got it in the first place. If replaced, be sure you are filling in the Replacement notice on the new application. If an agent says to stop paying the policy before applying, run. They are ethically challenged, and you may become uninsurable or be denied coverage and not be able to get ANY LTC insurance-ever.
Maybe dropping the inflation and adding a small policy that pays cash would be good. Even if CalPERS is slow to help get folks information, they are still subject to audit, and if a claim is legitimate, they will eventually pay it. Customer service challenged? Maybe. Crooks? Certainly not.
When evaluating long term care protection, verify the company is controlled by your State Department of Insurance. The California Department of Insurance will only allow a rate increase with “with proper notification and approval from the Department of Insurance”.
California Department of Insurance Commissioner Dave Jones has sponsored Assembly Bill 999. Created by Mariko Yamada (Assemblymember and Chair of the Assembly Committee on Aging and Long-Term Care), Assembly Bill 999 is designed to further restrict long term care insurance rate increases.
Long term care insurance policies certified under the California Partnership for Long-Term Care allow you to protect assets equal to what your Partnership policy paid for long term care services in addition to the amount Medi-Cal would normally allow. These protected assets will be disregarded if you apply for the Medi-Cal program.
Importantly, policies certified under the California Partnership for Long-Term Care have stricter limits on any future rate increase than policies not certified under the Partnership.
See: http://www.skloff.com/Articles/CAPartnershipProgram-LTCU-071510.pdf
Aaron Skloff, AIF, CFA, MBA
CEO – Skloff Financial Group
http://www.skloff.com/services-ltci.htm
I distinctly remember being told at the time I signed up for the program that I would never have to worry about the premiums going up. I also recall a much younger co-worker with a history of family medical issues who decide to sign up in her twenties in order to lock in the premium price. Her premium was almost one-third my rate. That was an excellent LONG-TERM investment for her at the time…until the honeymoon ended…for all of us. The idea that CalPers Long-Term care is not soliciting new members inevitably puts the burden on current members, essentially, to hold their breath waiting for a life raft that does not appear to be coming.
I purchased Cal-PERS Long Term Care Insurance in 1996 because it promised that the purchaser would have the option to remain at home and hire required help with the guarantee that the purchaser could count on a certain amount of money from insurance payments to help with the cost. I chose the most expensive and flexible Plan with an inflation factor built in. I have paid regularly all of these years fully expecting that when I needed this plan it would be in place and would follow through on its obligations. when I went to set my IP in place, whom I had been working with over 8 years, they denied her based on evidence of training. I have worked and worked with them to try and get reimburment for care and I have been deined everytime. They threatened to drop me by the end of the week if I didn’t comply with their rules, which still are not clear to me.. I’m appealing the decision but am not getting anywhere. I AM VERY INTERESTED IN A CLASS ACTION LAW SUIT. THIS IS UNREAL!! PLEASE EMAIL ME @ [email protected]
did you find anyone to represent you? our problem is the checks are issued sporadically – It took a while to notice they skipped a pay period every once and a while – found 3 missing .. so far
anu progress pete
IM READY FOR A CLASS ACTION LAWSUIT!! I purchased Cal-PERS Long Term Care Insurance in 1996 because it promised that the purchaser would have the option to remain at home and hire required help with the guarantee that the purchaser could count on a certain amount of money from insurance payments to help with the cost. I chose the most expensive and flexible Plan with an inflation factor built in. I have paid regularly all of these years fully expecting that when I needed this plan it would be in place and would follow through on its obligations. when I went to set my IP in place, whom I had been working with over 8 years, they denied her based on evidence of training. I have worked and worked with them to try and get reimburment for care and I have been deined everytime. They threatened to drop me by the end of the week if I didn’t comply with their rules, which still are not clear to me.. I’m appealing the decision but am not getting anywhere. I AM VERY INTERESTED IN A CLASS ACTION LAW SUIT. THIS IS UNREAL!! PLEASE EMAIL ME @ [email protected]
I too was one of those trusting State of California employees who (in the 90’s) believed the sales pitch for CalPERS Long-Term Care Program. I was also told if I opted in for their top plan with inflation guard (at the highest premium) I would never have to worry about rate increases and would have comfort in the knowledge that I would be able to rely on long-term care 40 years later without being a burden to my children or other family members. When I called to complain about the 1st rate increase I was told I must not have read the “fine print”! But I feel terrible that I talked my mother into buying into this plan also. She was widowed at 51, had only worked part-time her whole life so not much of a retirement income. She didn’t even have health or dental insurance until SS at 65! But this was in the 90’s and we still had blinders on! She eventually dropped the plan when she had to choose between paying the premiums or paying her living expenses! I cringe when I think about how much she paid into the lie and I encouraged her! She did ask me though if I would take care of her when the time came — it has and I do! I am seriously thinking of cutting my losses too but am livid when I think how much I have already paid — does anyone think that might be the plan? If enough of us pay for 15-20 years before finding ourselves in my mother’s predicament and cancelling, then CalPERS Long-Term Care Program can roll in the free “big bucks”! I have calculated my original premiums could go up by 800% before I might need them (or maybe die first)! I too would be very interested in a Class Action Lawsuit — if anyone hears of one contact me [email protected]
I have many clients who are experiencing the same troubles with their CalPers LTC Policies. I have advised them to replace those policies only when it is suitable to do so. If you would like my assistance, do not hesitate to contact me @ [email protected].
CPLTC has refused to accept the caregiving agency my husband has been using though CPLTC says it “qualifies” him except for that. We are promised a list of agencies that will assure our qualifying fully but according to CPLTC’s mailing schedule we can’t hope to receive it until around July 27. Moreover, the verbal information given by phone indicates that its listed agencies are more expensive than our present one. Meanwhile, we may or may not be spending money that contributes to the 90-day deductible period before payment from CPLTC could begin. This message is just to alert readers to tactics being used by CPLTC. After all, it had sent an RN to our home who talked with our caregiver so there was no secret about which agency we used when we applied. Why weren’t we told then that it wasn’t good enough? The irony is that the disqualification stems from our agency’s uncertainty over whether it could afford the monthly supervising visit to our home required now by CPLTC, and yet CPLTC itself has no outside supervision! MSV
The CPLTC problems are well stated above.
In the narrative above, ANTHONY PIGNATARO, author, wrote:
A fund breakdown shows 18.3 percent of the fund is in international stocks, 28 percent in domestic stocks, 48.8 percent in domestic debt securities (mortgage debt and so forth) and the remaining 4.9 percent in real estate.
Seems like some risky investments, like real eatste. However, if the real estate portion was invested in long term care facilities for CPLTC members wouldn’t that be a good investment for all of us? Also, the CalPERS retirement fund, likewise, has investments in real estate – why not those funs be into long term care facilities too.
Thinking out of the box, but why not. We need some solutions soon. VMU
Here is a news article from October 04, 2012: CalPERS Weighs 75% Premium Increase for Long-Term Care
http://www.californiahealthline.org/articles/2012/10/4/calpers-weighs-75-premium-increase-for-long-term-care.aspx
Unbelievable. I also have been paying into the fund since its inception, and would be interested in joining a group legal action.
CalPERS originally offered long term health care suggesting at their presentations that the cost would remain the same as the entry cost. That hoax has long been dismissed. Now they are suggesting an 85% increase that they “Hope” will stabilize the program. I think they need to get out of the long term health care business, give back to participants all the money they have put into the system, plus the average return on investments, and fire everyone associated with the program! This program is a scam!
Read more: http://www.californiahealthline.org/articles/2012/10/12/calpers-considers-85-rate-hike-for-most-longterm-care-policies.aspx?c=1#ixzz296uUkyt0
I also am outraged as to the financial cost and coverage changes in the CalPers Long Term Care Policy that I puruchased in 2002. Like everyone else who purchased, we thought that it was a responsible move on our part to make the purchase and not be a burden on our families. My feeling of being cared for in my older age has been taken from me. I was reading a letter I received from CalPERS dated July 24, 2002 where it is stated that my application has been approved and they are pleased that I have chosen the CalPERS program for my long-term care coverage and they are looking forward to serving me. The only thing they have done is taken my money and that of others who have the policy. We have been totally duped.
That said, the fact is we do need a lawyer to represent us, and I don’t think that going to 60 Minutes as suggested by one of the above commenters is too far fetched. Yes, I am interested in joining a class action suit. I am including my email address ([email protected]) for anyone who would want to be in touch regarding any action that we could pursue.
A 13 year participant of PERS LTC program…Myself and Spouse beginning premium $200 a month, premium now $490 a month; projected premium with ten years coverage instead of life time based on 85% increase will be $908 a month.( we are 75 & 78 )……The markets have recovered but all the bad Mortgage and Default Swaps paper still exist. The Government has bailed out Wall Street and the Banks and Foreign Investors ( still on going) and will also have to do the same with all the Insuance Companies soon for the same reasons. PERS LTC will not be in on the bailout because of its one of a kind entity so it will face BANKRUPTSY. This afternoon I submitted My termination notice The main reason was the risk being to great on not being in existance should we need the benefits in the future.
I have been on the phone to CalPers for an hour while reading the above material. We have been very happy with CalPers Long-Term insurance since my mother had her stroke on 8-10-10. However, a short time ago we received a form that states the following: A receint review of your account indicates that incorrect premium amounts have been deducted from your retirement warrant for health benefits coverage. CalPERS is obligated to obtain correct monthly payments from you and your former employer to ensure that your health plan is properly paid. Please send a check for $791.64. There is no other information regarding the above and I have been trying to receive clarification as to what the above all means. I’m about to hang up–can anyone advise me as to what to do next? Thanks. Up until the receipt of this letter, we have been very pleased. 😕
Reading the foregoing, I feel more like the statue than the pigeon. LTC enrollee since 1998.
Cal Markey
I’m having difficulty with getting service from the CalPers LTC administrator in Minnesota. Long delays in replies, slow mail response all of which will affect my 91 year old Mother using her long term care insurance benefits she purchased 20 years ago.
Does anyone have experience with I can call and talk to to complain? Perhaps I should go to the Department of Insurance and file a complaint. There are no phone numbers to call for anyone in Sacramento.
Suggestions would be appreciated. Thank you.
My mother went into a nursing home 2 years ago and CalPers started paying for her care in January 2011. Since then CalPers has missed 9 (monthly) payments, including most of 2012. She cannot do anything for herself other than eat and even is beginning to have trouble with that. We keep sending claims to CalPers but they just don’t pay. No denials, no nothing. I have spent 10 hours on the phone with them just in the last few weeks, all to no avail. She is going through her savings very fast and I am extremely worried. I don’t know what to do!
I have been a member since 1995, with the “cadilac” plan that was promised (verbally) to never go up. I was disturbed when the first rate increase happened way back, and now reading all the above, I really feel duped and am definitely questioning what I should do. I am not in a position to spearhead any group action, but definitely want to participate if anyone is beginning any such action or group. I am astounded at the lack of oversight by any insurance agency, and at some of the tactics being used by them to delay or avoid paying benefits; and I am very disturbed that they apparently leave so much undocumented and change rules after the fact. I don’t know much about investments, but it seems they perhaps don’t either. Where can we find the names and qualifications of those people managing OUR funds and contracts with them? I do seem to remember reading something in the Times about questionable behavior of some CalPERS board members. Somehow, it seems to me we 150,000 members may need to organize ourselves to save the program in which we’ve invested for our security. Here is my email: [email protected] —— I want to join any group or action available.
Hello fellow CalPers LTC victims,
I wrote on this blog on November 15, 2010. Now over two years later, our situation is becoming even worse. I just got a notification that my rates will increase by an additional 85%! As those of you who have been involved with this so-called insurance for some time now, each time there has been an increase, the strong implication was that it was a course correction and with that increase, all will be well.
I have the distinct impression that the people at CalPers do not know what they are doing. This is not reassuring as I am also retired under CalPers. I was just offered a limited time coverage (10 years) with not rate increase. I asked what happens after 10 years if I still need payments for care? I was told that the average person only uses about 2.5 years of coverage. I said, well then, why do you want me to agree to a 10 year limit if this is the case? The person I spoke with said that some people are covered for care for 30 years. I said well there you have it! What if I need more coverage than 10 years? Move up to Oregon and commit suicide?! This is horrible!
Those of you who are interested should work together to launch an aggressive campaign to make CalPers accountable. At a minimum I want a full refund for what I have paid into this plus interest. They have had my money since 1995 and I want it back. Based on what I am hearing above, I have no confidence that I will get ANY coverage if or when I need it.
We should set up a website that facilitates coordination of our efforts. Is there someone there who could do that?
Email me at: [email protected]
Joe
My husband and I have been paying premiums for Long Term Care (with the inflaction provision) for approximately 20 years. Every time our premium goes up we ask ourselves what we can do about it. I’ve called and complained but feel as if I’m just wasteing my breath. Now that we will probably have an 85% premium increase I would join others in participating in a class action law suit. I agree that this is a Ponzi scheme and we are the victims. I’ve thought about terminating my coverage but, like others, we have paid so much over the years with nothing to show for. If anyone out there can initiate a class action suit, count us in. ([email protected])
I’m with you! This increase will wipe out my PERS retirement (which was minimal to begin with). I feel so violated after paying into the LTC system for 13 years and then to have this sprung on me. As you say, we’ve paid so much into it but are now being forced to take a lower coverage for a higher premium. I’m pissed! ([email protected])
i’m with you…..i have paid and paid and am going to cancel today. just can’t take any more increases or watering down of coverage. i was told when i signed up, for the highest option, that there would be no increases. what a farce! the middle class is sinking, no one cares. my pension is $1900/mo. net…..who can afford higher premiums? i already pay $149/mo. i’m tired of trying to protect myself. screw it! if i get sick, i’ll just live in the street, i guess. that’s life!
My wife and I have paid uncountable thousands of dollars over many years for the most expensive “Cadillac” coverage of life time, inflation adjusted, multiple level care LTC insurance. I understand that for conventional LTC insuraance plans, the State, thru the state insurance commissioner, assumes responsibility, when an insurance company, liscensed by the State, fails. Apparently, our plan has now been placed under the administration of Univita Health, Inc. of Arizona – which I suppose is trying to find a way of saving the plan – thru 85% premium increases – which will cause some participants to drop out, further weakening the Plan. WHAT I OF COURSE WOULD LIKE TO KNOW (FROM SOME PARTICIPATING ATTORNEY OUT THERE) IS WHAT IS OUR RECOURSE IF THE CALPERS LTC PROGRAM GOES BROKE – HELP, HELP.
They need to transfer the whole program to a good insurance company with a great track record. With so many member, I’m sure they could find a lot of bidders. They should have done this a long time ago. This program appears to be financially broke, and will probably declare bankruptcy, and everyone will lose. I’m going shopping while I still can. A little bit something is better than a lot of nothing.
When my wife told me on our morning walk that she had got a letter from CalPers saying that her LTC premium was going up 85% I thought she was now ready for the LTC that she had been paying for. But on closer examination she was correct. I have the LTC but not the Cadillac one she does. The 85% increase is designed to do one thing and that is to force members to select a cheaper coverage other than life time with inflation guard. Perhaps, they will offer a free ride to the “ice flow” after our shortened time runs out. Sign me up for the class action law suit.
Now that we know this is a fund managed by the criminals…er, politicians, themselves, with no oversight, I’m canceling too. This 85% is only the beginning. They will be bankrupt by the time I need it.
I would love to know what they have been investing in over the years–stocks of companies owned by their contributors? Solyndra?
Calpers is also going to “invest” $800 billion of our money in infrastructure projects. There goes my pension too.
I’m pretty healthy and will wind up in the same boat eventually as everyone else who has been cheated by the government. See you at the homeless shelter!
Sign me up for any class action lawsuit. CalPERS is guilty of misrepresentation of their LTC product: they clearly do not have the skills and capability of providing the services they sold us. Are their executives equally sharing in the financial pain ?Hopefully no raises or bonuses have been distributed amongst their ranks.
I was certain “85% premium increase” was a typo! Guess not. It is not a typo…just obscene!
We enrolled in the CaPERS long-term care program in 1996 when it was first offered through California State University, Long Beach. At the time, I was 54 and my husband was 57, a good time to buy lifetime long-term care coverage.
We are now 71 and 74 respectively and CalPERS is pulling the rug from underneath us by increasing premiums by an astronomical 85% in 2015 (plus 5% annual increases since 2007).
Now that we are older and getting closer to the time we may need LTC, our premiums will increase to over $1,000 PER MONTH. We are in favor of a class action suit.
Interesting that the premium increase/decrease in benefits pertains only to people who in enrolled in the program from 2004 or earlier. Statistically, this would affect many more enrollees who are older.
The program originally promised a fixed premium for life, if you signed up young. So we did and now we have paid in over $30,000 in premiums. We’re only 65, so the option of decreasing the benefit period to 10 years and continuing to pay high premiums doesn’t make sense. Besides, as several of you have pointed out, there is no assurance that this is the last 85% increase. So, we may just drop coverage and depend on Medicaid if we have a long term illness. Another theft by government deception.
I started to hyperventilate when I received and read the CalPERS February 11, 2013 letter. I,too, had to read the letter a second time because the 85% increase just couldn’t be correct.
I concur with all the statements other commenters have provided. Like one of the writers,, I thought I was buying a policy that was the “Cadillac” of the industry–with its “lifetime benefits and built-in inflation protection.”
One more case of hard working people, playing by the rules, getting screwed. I’m going to make this situation known to the Los Angeles Times’ Business Section. Might be good for others of you to alert your local media sources.
We also received the letter dated February 11, 2013, from CalPers indicating that the policies of both my wife and I are: “…subject to the 2013 and 2014 five percent premium increase, as well as the 2015 premium increase of approximately 85 percent.” This essentially doubles our LTC premiums in two years! This proposed increase is totally outrageous! Certainly there is an attorney in the CalPers LTC program who will file a lawsuit against CalPers for this absolute travesty? Sign us up for a class action lawsuit as well.
We have been paying into this damn LTC program since 1999. The least CalPers could do would be to refund the premiums already paid instead of doubling our premiums or forcing the LTC members into reduced coverage options. There ought to be some accountability for these idiots!
They aren’t raising the rates on every plan, because then everybody would cancel and the plan would collapse. Who runs this fund, Bernie Madoff??
Writer to your State Senator and Assemblyman and demand an investigation. I want to know who mismanaged this thing and where the money was invested.
http://findyourrep.legislature.ca.gov/
Feb.18,2013
I believe that all who are affected by these “illegal” premium increases need to join in a class action lawsuit. I clearly remember (as do many others that I have talked to ) in the initial presentation that premiums would not be raised. I checked with our financial planner who stated that this was a great plan. On the surface it appeared so. They were signing up many folks and then they stopped which left the rest of us to maintain the burden with the ever declining investment revenue. Ironically they (the board) has chosen to have the initial participants shoulder the burden which is clearly most onerous for the very ones that got it started in the first place. I believe that this is a fraud as it stands currently. It is no different than if Cal PERS went broke. Their name is on the product, they got subscribers based on the value of their name and therefore should fix the problem they created. What would happen if PERS went broke? Would the legislature come to the rescue? Bring on the lawsuit. Does anyone know a capable attorney???We need help!
I am meeting with SALA (Senior Adult Legal Aid) next week to see if we can get a class action going. I was lied to. I have paid into this for over ten years.
I don’t know what good a class actions suit can accomplish it they’re broke, but I support one as well if it makes sense. In the meantime, what do we do? Sounds like this has been a poorly run operation from the start and it might be best to cut our losses and shop other more stable companies.
“They need to transfer the whole program to a good insurance company with a great track record. With so many member, I’m sure they could find a lot of bidders. They should have done this a long time ago. This program appears to be financially broke, and will probably declare bankruptcy, and everyone will lose. I’m going shopping while I still can. A little bit something is better than a lot of nothing.”
This appears to be a pretty good analysis of what is happening and what should happen. My husband and I joined Cal Pers when we were younger and in relatively good health. Now, after 4 rate increases in 10 years, I have lost faith no matter what they offer. I think they are hoping to attract enough suckers(sorry)to pay the claims they are already are on the hook for and then continue to raise the rates until most people will have no choice but to drop out. In the meantime, they will have built up enough of a war chest to keep them afloat until they declare bankruptcy, and exit the scene with some fat bonuses.
We have lost 50K and are too old now to find anything that isn’t astronomical. Unfortunately, we took the bait and now we’re screwed. Still, we are shopping around; maybe by some miracle we can find LTC with another company. We are also going to see an attorney for all it’s worth. The original material I read did state in legalese that rate increases were possible, but I never imagined that they meant this! Who are these people (the Board) anyway? I hope they get flushed out somehow, and have to answer for what they have done. In the meantime, the only real comfort we have is that, as it ends up, you don’t always need Long Term Care.
My wife and I have been paying into CalPERs Long Term Care policy for close to 25 years between us. I have noticed that we have been receiving periodic rate increases,but, this 85% rate increase is egregious. I am in my 60’s and my is in her mid 50’s. At our age we would be hard press to find an alternate comparable coverage at a reasonal rate.
What will prevent CalPERs for demanding even higher rate of payments in the future, even though, we accept reduced coverage with increase premiums? The answer is… there is nothing!! Their books need to be audited. They must answer to someone, us, the clients? If there is a class action law suit, we would gladly participate. This behavior of “shaking us down for more money” should not continue!!!
I have been paying into CalPers Long Term Care Comprehensive Inflation Protection plan since 1/1/1996 starting at $147.00 per month. I have taken their increases and also taken some reductions in my benefits and now my monthly premium is $222.92. My premium will go up 5% in 2013 and 5% in 2014 and 85% in 2015. That will make it about $455.00, which is too much for me.
I don’t think they should be able to raise premiums on one group. I called the 800 number today and was told that PERS LTC has 195,000 members and of those the raise will affect 183,000. That doen’t sound right when their recording stated they have 140,000 members.
We do not have information on how our money has been managed and invested.
Editor’s note: A new CalWatchDog.com article on this controversy, published Feb. 20, 2013, concerns the recent 85 percent rate hike. Click here:
http://www.calwatchdog.com/2013/02/20/outrage-at-calpers-85-rate-hike-for-long-term-care/
Todd,
I don’t what good a class action lawsuit will do either, but I have been paying for 12 years and I am going to try. That is why I am meeting with an attorney.
Possibilities:
-we get all or some of our money back
-they are forced to turn the operation over to someone else who will run it better
-there is an investigation that reveals facts helpful to us
-who knows.
but it is better than giving up. I just got a call from a friend who has paid out over $56,000 in fifteen years and she is considering canceling. I told her to hold on. Wait til we have more info
My initial reaction was like all the above. My partner and I joined in 1996, because it seemed like a good deal. My premium is now over $300/mo., hers is $225, so the 85% is huge. Shall we sue? She happens to be a retired attorney, and pointed out that class action lawsuits are Long Term Care
Insurance for attorneys. So we did some research. Guess what? It’s not just CalPers, its the entire industry. John Hancock is raising its premiums 90% for some clients. Prudential and MetLife and Unum are abandoning the business.
Check out the following:
Forbes Magazine, 8/29/12. “What’s Killing the Long Term Care Insurance Industry,” by the expert Howard Gleckman, author of “Caring for Our Parents.” The simple answer is that LTC costs are rising by 5% a year, but the interest companies can earn on our premiums is 1.6%.
Daily Finance, 3/20/12. Some of the same material, and the source of the 90% premium rise by John Hanccck. The concluding advice: Paying for the insurance, if you’ve got it, is still a whole lot better that paying $75,000 a year for care, if you need it. And if you don’t have it, too bad, because nobody’s selling it any more.
The father of a friend of mine is 91 in a skilled nursing facility in Napa, with 24-hour nursing available. It’s lovely, and costs $10,000 a month. There’s enough money to keep him there another 26 months, after which his assets (which is basically his wife’s inheritance) will be gone, and his four children will get nothing but bills when he passes.
Twenty years ago my mother was paying $350/mo. for LTCI. She dropped it, and managed to live independently to age 90 and was hospitalized for only a couple of weeks before she passed. She bet correctly.
What’s your situation?
We signed up for an inexpensive plan that turned out to be too good to be true. If the boom years had continued past 2007 we’d still be enjoying the ride. I believe that the blame should be assigned to those who wrecked the U.S. economy with deregulation, trickle-down theory, and simple greed. They aren’t having any trouble paying their premiums.
My partner and I aren’t going to cancel because we don’t want to burden each other at the end (my pension and SS total $2,100/mo.).
I believe that we should also involve the local media to do a true investigation. Like in the old days where they actually check out the facts and uncover the facts behind this Ponzi scheme. I don’t know how many of you remember the large room (auditorium) we sat in and were told that there were two plans available . One covered all the needs and the other was somewhat scaled back. We were further told that the premiums would be level . At first PERS LTC denied this and then when last I contacted them they indeed acknowledged that we were told that premiums were to be level. In addition it seems to me that the board in authorizing these increases is attempting to force those of us on the premium plan to move to the lower tier. Since the premium plan is being hit with the highest rate increases. This is clearly discrimination.
I am contacting the Sacto. Bee to see if they may be interested in doing an investigation since so many people are affected. Those of us on this website need to stick together and see if we can find a remedy for our common problem.
I have been paying into Cal Pers since 2002. Have seen my rates increase from $192.00 to $412.25. Two more years of 5% increase, then a 85% increase would put my premium over $800.00 per month. I am on a fixed income and cannot afford that. I’m all for a class action law suit. I plan to cancel. I am healthy and will take my chances. I’m 76.
Good info from Peter Fisher. I have a two-year plan, so it’s not the Cadillac.
My question is, why sacrifice the full satisfaction of life today to buy some extra years at the end? And now we realize it’s not financially possible to do this for everybody.
I’m leaning towards canceling. And taking control of my own life and own happiness now.
I’m damn mad. Why weren’t we told about this when CalPers first got in trouble, financially. Are people with the lifetime coverage the only ones whose rates are being jacked up? I feel this is highway robbery. We need to get our investment back, with interest! I’m ready to do whatever it takes to, at least, be reimbursed. Here I thought I was protecting my daughter from having to take care of me in my old age. What do they want us to do, crawl under a bridge and die. We are the largest part of the population. We can make a lot of noise. Can someone think of something to make them pay us back?
Why was my letter removed?
If in fact, CalPERS is the second largest Long Term Care Insurance in the nation , they are not currently broke. We know that the same people who first became members with Lifetime Policies are being expected to sustain CalPERS in the future. Not everybody is being charged 85% more only those who joined in the beginning and are owed care are. being asked to take on the burden for the future. This is the same trickery that is being played on the Post Office. Making them pay beyond to sustain retirements that is not required anywhere else. It makes them look broke. We have a right to see the books.
3 years covers most people who need care. Can someone answer these questions for me?
1) is the rate increase only for unlimited benefit periods?
2) is it only for those with 5% compound inflation riders?
If you can avoid the rate increase by moving to a 6 year or 3 year benefit then do so knowing you still have extremely significant benefits and protection.
If you remove the 5% compound inflation rider are you able to keep all of the inflation growth since the policy was purchased and the benefit will not be flat? If so, that is not such a bad deal.
For those who cannot afford the increase I would reduce the benefit period to 3 years and keep the inflation if you can. If not, drop the inflation rider. Even a $3000/month benefit will help if you need care. Hopefully that will produce an affordable premium.
Another strategy is to consider switching the expensive Plan F Medicare supplement you have to a High Deductible Plan F supplement and channel the savings to the LTC premium.
Whatever you do not outright drop the policy. It will pay.
Lawsuits that delay the implementation of the rate increase will only make the problem worse and necessitate a greater than 85% rate increase later.
As far as another company wanting to come in and buy this block..I doubt it. It is a sinking and unprofitable block of business. It might be attractive if there were no lifetime benefits. Maybe they could make a deal to have current 5% compound inflation rider people agree to lower the inflation rider to 2-3% from this point on. That should help PERS with their future numbers.
Like the rest of you, I was completely devastated to get my most recent letter from CALPERS indicating that I had two years ( with n annual increase of 5% per year in premium) to decide about my “new” increase of 85%!!! I am 72 and have had this policy for 20 years with no claim history, even though in 2011 I had an aortic anuryism repair . At that time, I provided all my own funds for home health care, saving my LTC for any future problems. I am a retired teacher on a pension and do not have the finances to fund LTC. I thohght I was planning for the future and did not want to burden my children – what a devastating surprise. How do I know these people will be in business in two years?
Right now , I am hyperventilating for being lied to by the Calpers longterm care representative when I was 59. Now, i am 70 and will be 71 next month. Who would think that a sponsored longterm care insurance company by the department California Department of Education will do this. You said , everything I want to say. I am willing to join the lawsuit. I called and wrote the California Ombudsman of insurance. They told me to fill out a form yarda yada yada. I also called The Callifornia customers, service on your longterm card. They can’t give me an answer.
Analogy: A person told a 5 year old, a kindergarten, I will give u an ice cream. I can’t give it to you today. I will give it to
U in spring or in the summer.
Not good! Here is my email: [email protected]
Let me if someone is starting a suit. I am glad to hear someone feel the same
Cres
Here is what has been proposed.
Possible 5% increase for two years. 10%
One year of 85% increase. That year can be paid for in two years, with a discount if the money is paid in one installment.
Then the premium reverts to what it was without the large increase. Please review the information.
85% is for one year only-not a permanent increase.
“Whatever you do not outright drop the policy. It will pay.”
But how do you know that? We have no access to their books, and it sounds like they are obligated to pay the lifetime care claims that are draining the coffers.
At the time I signed up for this LTC program, I was not told it was held differently than other LTC policies and that the Department of Insurance would have no oversight. Had I known that, I would not have signed up for it. Now I am in my 70’s and a new policy would be too expensive for me to buy.
Why should those of us who bought this policy in good faith have to pay more now because of the poor judgement of CALPERS LTC employees who made terrible investments for the Long Term Care program, and the bad decision to stop taking new members. Obviously, those in charge did not know what they were doing.
IF A LAWSUIT IS INITIATED, I WILL JOIN. What I’m wondering now is what will my standing in the lawsuit be if I drop this policy now???
Like others that I know, my memory is that, if I signed up for Long Term Care the first year it was offered, there would be NO increase in premiums in the future. I.e., like life insurance, getting in at a young age would mean lower rates for a longer period of time rather than the risk of much higher rates at an older age. I have been dismayed at the steady increases over the years, but, again, like others, I have not wanted to stop the policy due to the large amount I’ve paid into the plan since the first year it was offered (15-16 years? More?). I would happily join in a lawsuit if that would help…but I am not sure anything will help, including a lawsuit. What a MESS!! Additionally, after dealing with them for an entire year about premium payment/computer glitches caused by a transition to retirement, I am not feeling very confident about their administrative abilities. I have spent literally hours talking with them over the last year — and have been assured that all is well, that I owe nothing, etc., etc., only to get yet another letter saying that I owe them a payment. I have provided the requested information about the automatic deductions (which have been in place for MONTHS), as well as additional payments by check (necessary during the transition to retirement), but it has still not been resolved after an entire year. No wonder they always need more money…the cost of care is going up, and they can’t administer the program effectively.
Thank you to Bill Franklin. Paying an extra 85% for one year with the option to split up over 2 years is not so bad. Then the annual premium goes back to what it was + 10% sounds very reasonable. Can we drop all of the lawsuit talk? Nobody at PERS did anything malicious. Also it is nice that people never put in a claim but beside the point. You have had the protection and that is worth something. If you cannot afford the premiums then cut the benefits back. It is good that you have this coverage and you need to keep something. Ask your kids to help you pay the premiums if necessary. Let them think of it as “inheritance protection” insurance.
Someone wrote:
If you can avoid the rate increase by moving to a 6 year or 3 year benefit then do so knowing you still have extremely significant benefits and protection.
I have lifetime. When the rates went up in 2011, I called them and they said a switch to the 6 or 3 year plan would keep my rates the same. I switched to the six year plan. Now I am told the six year plan is one of the ones impacted by the 85% raise and had I stayed with my original lifetime I would not be so impacted. Lies lies and more lies. I met with Senior Adult Legal Assistance and they are reviwing the case.
My wife and I bought long term care from CalPers in 1995. The policy was lifetime with adjustments each year for inflation and advertised as a level premium policy. We retired (wife in 2003) and myself in 2004. At that time our joint premiums were $1872. This year the premiums jumped to $4785 or 155% increase in 9 years. When the new charges are added in 2015 our premiums will escalate to $9,759 or a 431.3% increase since 2004. That is an average annual percentage increase of 35%. The action by the CalStrs board is unethical and beats most pyramid schemes I have ever known. We have invested so far $48,553. I have requested the right to address the board (in a formal letter) but have not heard from their administration. I do know something about health care cost increases as I retired as superintendent of the largest high school district in the United States. I believe board should be contacted as well as the California State Insurance Commissioner.
Bill Franklin – Where did you get your info? The letter is not that specific.
Unlike some others, I did not ASSUME what the letter said, I called and inquired. The 85%, according to what CalPers told me over the phone, is a PERMANENT increase. I, too, thought it was just a two-year deal. Wrong. So the premiums will be permanently increased by 85%.
Of course, I was led to believe there would be no premium increases when I purchased the policy, also. However, the person on the phone pointed out a sentence in the policy that obviously made that belief an incorrect assumption. Talk about misleading!!
So I guess we’re the stupid sheeple: For believing what we are TOLD about the policy when it is not in writing. Warning alert: Don’t believe anything you are told NOW, either!!!
There better not be any CEO or executive bonuses or big salaries: Their duty is to run the company in a financially sound manner, which obviously no one is doing. Until then, maybe THEY should forfeit their salaries?
Shouldn’t there be a class action lawsuit for those who have paid into long term care right from the beginning since they were promised the price was guaranteed not to go up? That was the reason many people joined the program, for peace of mind knowing they would get the care promised to them and with the guarantee the price would not increase.
Just curious why an attorney hasn’t jumped on this.
This is so typical of government and the unqualified people supposedly making the “right” decisions. We have paid thousands of dollars over the 17 years of premiums. Now we’re told, after several previous increases in premiums, that we will see a 5% increase in 2013 and 2014, and 85% increase in 2015!!! THIS IS A 104% TOTAL INCREASE IN 2 YEARS. The premiums will almost be as expensive as the monthly long-term care. This is a manipulation of honest, hard working people.
Who’s to say that in 2006 or 2007 there won’t be another large increase. There’s no controls over government spending or taxation. They don’t want to tell people that the program will go bankrupt in 3 years, if they did they wouldn’t get the premiums they will be receiving over that period. I think refunds are in order. They stole our money without any recourse on our part, probably knowing that the end was near. Do I hear jail time??
Dan, I Agree with you 100% except that I think you mean in your second paragraph that who is to say that in the year of 2016 or 2017 that there won’t be another large increase. My husband and I have also been in the long term for over 16 years. I am 87 and he is 91.
Thank god we are in good health but these increases are forcing the members of the plan unbearable hardships that are causing the living standards to be compromised. My husband says we can’t afford but one meal a day now,
I purchased CalPers long-term health insurance back in 1995. I paid the highest rate possible with their offer of “inflation protection.” How can an 85% increase in rates be legal with inflation protection? I, too, feel stuck because I have so much invested in this. Please count me in on a class action law suit.
I am very dismayed that this CalPERS long term care insurance has turned into such a disaster for so many of us. This can’t be legal. I would join a class action suit. I would like all the money I paid into this program returned to me. Judith Bartels
First of all I definitely would like to participate in a Class Action Suit against PERS Long Term Care….You can absolutely count me in.
Also, PLEASE LET ME KNOW IF SOMEONE IS INITIATING A LAW SUIT.
I am very dismayed that Cal Pers long term care insurance has been a total waste of money!I purchased the LifeTime plan and paid the highest amount. I retired 11 years ago expecting that the money I struggled to pay each month for this plan would help me have a better life as I aged.
I have been paying Long term care for 15 years…I started at 51 because I didn’t want to burden my kids when I became older….I am now OLDER 66 yrs old and there is no way I can keep this Insurance…it is a total rip-off of the money I struggled as a single parent to pay for the last 15 years. I had to cancel this because they just keep making it IMPOSSIBLE to keep…
I truly hope for all of our unhappy owners of Long Term care that there will be a Class action suit and we will get our money back because we now have nothing after paying for it every month out of our checks. I wonder how they sleep at night?
I submitted a complaint today May 7, 12:03 and want my email address added to my comment.
It is [email protected].
Please notify me if there is a Class Action Suit filed against Cal Pers Long Term care.
This has caused unbearable hardship and will cause my living standards to be compromised!!!
I called my NY Life insurance agent and he told me option 3 is the best option if you think you are going to need nursing home, $330 per quarter is still the cheapest in the industry, I have paid for over 18 years, I am not just going to stop, option 3 also includes inflation protection. I am sure this rate will go up after 3 years, then class action suit will follow. If you don’t think you need nursing home care and you can get by home care, then option 4 is the best. I would go to other insurance companies and compare their rates with CalPERS, you will be surprised.
I too have been in this system for 20year. I had to drop the coverage effective June 1, 2013. This increase to almost $400 is too expensive for me to continue. I was under the impression when I signed up there would be no increase to my premiums. I feel since this increase is far too much for me to pay we should at least have our premiums we paid returned to us. This cost would represent 20 percent of my PERS retirement check. As a widow on a very tight budget I can not continue this coverage. Now I feel I have been placed in a very horrible position of having to take charity if something should happen to me.
I have been paying for Calpers long term care for several years and recently with my wife’s health failing, I submitted a claim for some benefits because she was put on Hospice on April 1, 2013 and her deductable period then ended according to our policy. She passed away on April 10, 2013. I have been paying a qualified care person $23.00 and hour for her care through Support For Home Care. I got a letter today stating that I will not be reemburst by Calpers Long Term Care even though by their rules, I would qualify. Because of their mismanagement of this company, they don’t even pay the claims to those who have paid many thousands of dollars for expected care. I would like to join in a class action suit against this company.
Dealing on behalf of my father-in-law who is in stage four brain and lung cancer. Unfortunately, his significant other was involved in choosing his “IP”, home care giver. This person was contracted at the recommendation of my f-i-law Kaiser – covered hospice care giver. Almost 4 months into the process and CalPers sends a letter denying the home care giver payments. My father-in-law hs been paying the expense out of his pocket the whole time. The home care giver does not have professional liability insurance and the hospice care provider states he is an independent contractor. He is bonded but neither entity has professional liability insurance. Even on the their own website, CalPers does not list this insurance as a requirement for home care givers. What a farce. Months into the process and they are just now issuing this “verdict”. What a farce. My father-in-law is on his death bed and now gets to pay for his own care after so many years of paying into his long term care benefit. This is not the end of this situation. But come, on CalPers. Really. You are trying to deny coverage on something that you don’t show is a requirement? Shame on you
I wrote to the governor,the attorney general and the insurance commissioner about the increase in long term care rates. I have received responses from the AG and the insurance commissioner,both of whom said they can do nothing.This is what I expected so no supprise. They seem to be stating this is a state agency that is not in their jurisdiction. I would differ with their decision on the basis calpers long term care is now trying to bring the general public into the program. Calpers placed a large ad in the Union TRibune san diego paper apparently soliciting the public to sign up for the program. looks like a scheme to sign up new members to keep the game going. this looks like a Ponzi scheme and should be investigated for possible criminal action and no longer protected from the insurance department because the general public is involved. The ad does not say you must be a Government employee to qualify.
WOW!!!
I have been paying into PERS Long Term Care for 20+ years and getting near to age that I may require some of the services. I wasn’t aware of ALL their problems until today when I ran across this blog. I have kept up with their glossy newsletters but I’m shocked at what I have read here.
Do I stop paying now and look for something better??
Does anyone know of a quality and reasonable alternative to PERS??
Thanks for any info.
Most likely the lawsuit will proceed. The lawyers will get paid first and if there are any remaining funds, the money will be divided amongst the policy holders. I don’t expect that there will be much money left after the lawyers get paid first and in full. Then this leaves all the policy holders without any coverage. With Calpers being sued and having to pay out, there is no more long term care coverage provided by them. Now that we are older, good luck trying to get any other coverage at a reasonable price. The lawsuit is benefitting the lawyers mostly. For some of us, it made sense to pay the increase to be able to keep some sort of LTC coverage. Once the court case is done, we will each get a small payout, we will not have to pay premiums anymore, and we will not have any LTC coverage anymore either. Calpers is not an insurance company. It was a holding tank for our money. We paid in and the claims were paid from this. We are basically suing ourselves and the lawyers profit.
WHAT IS THE STATUS OF THE class action lawsuit? Supposed to go to jury trial 2/2016.