Column: Important Information on CalPERS Long Term Care

Important Information on CalPERS Long Term Care

For individuals who currently have CalPERS long term care (LTC) insurance, below is information distributed by Executive Director Jesse Slome of American Association for Long-Term Care Insurance, regarding a scheduled rate hike in 2015. 

The American Association for Long-Term Care Insurance was established as a not-for-profit trade group and focuses on educating both consumers and insurance professionals. For additional information on long term care insurance costs, visit the organization’s website at or call the national organization at 818-597-3227.

Take a few minutes to review carefully this reprinted information.

CalPERS Long Term Care Insurance Rate Increases Addressed 

Los Angeles; March 27, 2013 – Newspaper reports about an 85 percent hike in the cost of long term care insurance offered to California State employees tells only part of the story according to Jesse Slome, executive director of the American Association for Long-Term Care Insurance.

“Reporters today have to sensationalize every report in order to draw attention and they rarely tell the whole story because it’s just too complicated,” the head of the Los Angeles-based national trade group shared with a group of insurance professionals. “First, only a segment of those who purchased long term care insurance policies will be impacted and they are being offered options that will avoid the rate increase.”

Slome noted that letters mailed to CalPERS policyholders offer seven options. “The letters clearly explain that options include accepting the premium increase and keeping current coverage to reducing options such as the built-in inflation protection and even reducing the premium paid,” Slome notes. “Isn’t it funny how that never gets mentioned in the news coverage.”

“No one likes paying more,” Slome adds. “But in many cases these polices were purchased 15 years ago and the economic world has certainly changed over the past few years; not to mention that many of these folks are beneficiaries of increasing State-provided pensions.” Long-term care insurance policies offering five percent compounded growth options have been the ones most impacted by rate increases.

“Banks once paid four and five percent for certificates of deposit,” Slome explains. “Today, you are lucky if you get one percent and the low interest rates are the reason insurers and others such as CalPERS can not longer support five percent yearly benefit increases without charging higher premiums.”

The Association executive explained that current CalPERS policyholders will very likely still be paying less money for their coverage than they would for new coverage. “We field calls from consumers outraged but when they hear what comparable coverage costs today, they realize the value in what they have.” Slome notes that very few policyholders will drop their coverage. “That’s what the news reports would lead you to believe but it doesn’t work that way and we challenge any reporter to follow-up after the 2015 rate increase to report what actually took place. I’m not holding my breath,” he concluded.

Editor’s note: Sue Hofmann is an agent and Long Term Care Professional (LTCP) at The Jemez Agency,, 2610 Trinity Dr. in Los Alamos and can be reached at, 505-662-5181.

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