The State Worker

Deaths outpace new policyholders in CalPERS long-term care program

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Here’s a bit of information to add to our report last week about the decline in total policyholders in CalPERS long-term care program.

The reason, it turns out, is that existing policyholders died at seven times the rate that new policyholders came into the program, according to CalPERS spokesman Bill Madison III.

8,400The number of CalPERS long-term care policyholders who died between 2012 and 2014.

“Between 2012 and 2014, more than 8,400 policyholders passed away,” Madison said in an email follow-up to our earlier post. “Additional terminations resulted from non-payment of policy premiums.”

Meanwhile, the privately-purchased program, which covers nursing home care and similar services, fell by about 6,400 policyholders from Dec. 31, 2013, through the end of last August to roughly 135,600. Nearly 1,200 new policies were sold during that same period.

After last week’s item, several blog users asked a reasonable question: What does this mean to policyholders who have had coverage for many years? Does the decline in the number policyholders threaten the program’s overall solvency?

No, Madison said.

“More policyholders increase the pool of insured in the current product (sold since 2013), minimizing risk and keeping premiums affordable,” he said, “New policy holders are not necessary to keep the Long-Term Care fund solvent, and do not subsidize or otherwise affect policies purchased before 2013, which are distinct from the current product.”

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