The State Worker

CalPERS long-term care insurance pool shrinks

Despite a campaign to add new policyholders, the number of people covered by a CalPERS’ long-term care insurance policy has declined 4.5 percent since the fund reopened enrollment at the end of 2013.

The program, which covers nursing home care and similar services, had 142,050 enrollees on Dec. 31, 2013, according to CalPERS’ statistics. As of Aug. 31 this year, 135,634 people carried the insurance.

At the end of 2013, CalPERS reopened policy enrollment and expanded eligibility beyond CalPERS members, with radio ads encouraging listeners to sign up. Through Sept. 25, according to fund records, CalPERS received 2,122 applications submitted to purchase long-term care insurance and approved 1,197, or about 56 percent. The rest were either declined or withdrawn.

From 2008 to the end of 2013, CalPERS stopped accepting new applications in a bid to staunch the financial bloodletting the long-term care program suffered due to a combination of under-priced policies, loose underwriting standards, under-performing investments and claim costs that exceeded actuarial expectations.

The fund’s board also is sharply increasing premiums for older policies promising life-time and inflation-adjusted benefits that have been the biggest drain on the fund. CalPERS stopped selling those products several years ago and has encouraged policyholders still in those plans to switch their coverage to cheaper policies with defined benefits.

The moves riled up policyholders. A lawsuit is pending over the premium hikes.

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