Originally posted on February 6, 2017.

People who have purchased long-term care insurance through SEGIP will see a premium increase in each of the next 3 years. This post answers questions about when, why, and how much the premiums will change.

What is long-term care insurance, and how do I know if I have it?

Long-Term Care (LTC) insurance pays for a variety of services for people who are unable to care for themselves. Long term care services may include assistance in a home, adult day care center, an assisted living facility, or nursing home. Long-term care insurance is different from long-term disability insurance, which provides you with income protection in the event that you become disabled.

If you are a current employee, you can check your paystub to see if premiums for long-term care insurance are being deducted. If you have long-term care insurance and are not on payroll deduction, you would be paying premiums directly to the insurance carrier, CNA.

How much is the increase?

Premiums for current enrollees will go up by a total of 45.475%, with the increase phased in over three years. In the first year, premiums will increase by 15%, by an additional 15% in the second year, and then another 10% in the third year. Note that the rate increase described here applies only for Minnesota residents; changes for residents of other states may be different in amount and timing.

When will the premium increase take effect?

The first premium increase will go into effect on May 1, 2017. The long-term care insurance company, CNA, will mail letters to all subscribers in February with details about the change.

Why are my premiums increasing?

This is something that has been happening across much of the long-term care insurance industry. Premium rates are set using many assumptions about claims, how long people will be covered, how many will need long-term care services, and other factors. If the premium rates are too low to cover expenses, insurance companies can apply to state insurance regulators to increase them.

Is there an alternative to paying higher premiums?

Yes. You can make changes to your coverage in order to reduce your cost. This might include reducing the Daily Maximum Benefit, reducing the Lifetime Maximum Benefit/Benefit Period, and/or dropping optional benefit features. You will receive a letter from CNA that provides details about your options. You should read this carefully and pay close attention to the deadlines for making any changes.

Can my premiums go up again?

Potentially. Any future rate increases would have to go through the same regulatory review process as the one just approved.

Does SEGIP plan to offer any new long-term care insurance options?

We are examining other options and may offer a new long-term care insurance option in the future. However, experts we have consulted have told us that members of our current long-term care insurance product would be unlikely to find similar coverage at a better rate.