CalPERS is preparing to impose a rate hike of up to 85 percent on most of its long-term care insurance policyholders.
The rate hike would begin in 2015 and would be phased in over two years. It would affect three-fourths of the 150,000 CalPERS members who've bought long-term care policies, which pay for stays in nursing homes, convalescent homes and so on.
The proposed increase is somewhat higher than the 75 percent rate hike contemplated by CalPERS officials the past several weeks. The earlier estimate "was a work in progress," CalPERS spokesman Bill Madison said Wednesday.
As an alternative, CalPERS staff said the pension fund could raise rates 79 percent but do it in one year instead of two.
Either way, CalPERS hopes the rate hike will "stabilize" the long-term care insurance program, which has been hit with higher-than-expected claims and lower-than- expected investment returns. The program, unlike CalPERS' pensions, gets no taxpayer funding.
The hike should be enough so "we don't have to come back years from now" with another increase, Madison said.
The staff proposals will go to CalPERS' pension and health benefits committee for a vote Tuesday. The full governing board of the California Public Employees' Retirement System will take up the issue a day later.
Similar problems have plagued long-term care programs in the private sector. Several big private insurers have dropped out of the market.
CalPERS hasn't sold any new policies since 2008 and won't resume selling until the program is on more solid financial ground.
As part of its efforts to prop up the program, CalPERS also will offer a less expensive policy that provides 10 years of benefits. Currently, most of the members have lifetime coverage.
© Copyright The Sacramento Bee. All rights reserved.
• Read more articles by Dale Kasler
What You Should Know About Comments on Sacbee.com
Sacbee.com is happy to provide a forum for reader interaction, discussion, feedback and reaction to our stories. However, we reserve the right to delete inappropriate comments or ban users who can't play nice. (See our full terms of service here.)
Here are some rules of the road:
• Keep your comments civil. Don't insult one another or the subjects of our articles. If you think a comment violates our guidelines click the "Report Abuse" link to notify the moderators. Responding to the comment will only encourage bad behavior.
• Don't use profanities, vulgarities or hate speech. This is a general interest news site. Sometimes, there are children present. Don't say anything in a way you wouldn't want your own child to hear.
• Do not attack other users; focus your comments on issues, not individuals.
• Stay on topic. Only post comments relevant to the article at hand.
• Do not copy and paste outside material into the comment box.
• Don't repeat the same comment over and over. We heard you the first time.
• Do not use the commenting system for advertising. That's spam and it isn't allowed.
• Don't use all capital letters. That's akin to yelling and not appreciated by the audience.
• Don't flag other users' comments just because you don't agree with their point of view. Please only flag comments that violate these guidelines.
You should also know that The Sacramento Bee does not screen comments before they are posted. You are more likely to see inappropriate comments before our staff does, so we ask that you click the "Report Abuse" link to submit those comments for moderator review. You also may notify us via email at feedback@sacbee.com. Note the headline on which the comment is made and tell us the profile name of the user who made the comment. Remember, comment moderation is subjective. You may find some material objectionable that we won't and vice versa.
If you submit a comment, the user name of your account will appear along with it. Users cannot remove their own comments once they have submitted them.
Order Reprint
About Comments
Reader comments on Sacbee.com are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "Report Abuse" link below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.