Dixon couple 'shocked' by 102 percent premium hike

DIXON – David and Cheryl Long bought long-term care insurance about 10 years ago to protect their assets in the event one or both had to move into a nursing home.

The insurance was supposed to offset some of the cost of long-term care, be it in-home care, assisted living, or a nursing home.

“I had had friends that were in car accidents, a couple of them were single, not married and they ended up having to recover at a nursing home,” David Long said. “And it ended up coming out of their assets because insurance only covers 30 days in a nursing home.”

On Sept. 10, the Longs, both 71 and of Dixon, received a letter from MetLife, their insurance provider, telling them that their premium would increase by 102 percent.

If they keep the insurance for both, it will cost about $340 a month, compared to about $170 before the increase.

“I was shocked,” Long said.

The Longs are retired and living on a fixed income. Cheryl Long worked for the Illinois Department of Transportation, and David Long worked out of Local 25 Pipefitters Union.

They’re now faced with a decision: They can pay the increase, reduce the daily benefit by half, or cancel their policies.

In an emailed statement, MetLife said it determined increases were needed on four of its long-term care insurance policies and filed increase requests with state regulators.

“While we regret the impact of a rate increase to policyholders, current premiums need to be adjusted due to the cumulative changes in actuarial assumptions since the time these products were initially priced,” the statement said. “The impact of evolving assumptions on pricing is a challenge the industry is facing overall. To date, MetLife has implemented an increase on these policies in 39 states.”

The company declined to comment on the rate increases requested and approved in the 38 other states.

A failed bill

On Feb. 19, 2013, state Rep. Robyn Gabel, D-Evanston, filed House Bill 2333, which sought to cap the increase in long-term care premiums at 15 percent a year.

Gabel said she became aware that might be an issue worth addressing after hearing about it from her constituents.

“I just feel that people, they pay into it and they pay into it, and then at a certain point it becomes unaffordable,” she said.

In a news release from February 2013, Andrew Boron, director of the Illinois Department of Insurance, supported Gabel’s proposed legislation.

“State regulators have no discretion to limit premium increases if the rate filing meets standards, so we set out to change the law to further protect consumers,” he said in the release. “This proposal would impose a 15 percent cap on rate increases on all existing and future long-term care premiums, regardless of age or benefit configuration.”

After the bill was introduced, it was referred to the General Assembly’s Rules Committee. Two co-sponsors were added before it was assigned to the Insurance Committee and then re-referred to the Rules Committee on March 22, 2013.

That’s where the bill stopped.

Gabel said it was a hard year in the General Assembly, but that she’s optimistic the new session starting in January will bring new life to the bill.

State Sen. Tim Bivins, R-Dixon, said when Long called his office about the issue, it was the first time he’d heard about it.

It was his understanding, Bivins said, that the increase came about from a variety of reasons, including a relatively small pool of policy holders and long-term investments, which insurance companies are required to make, that didn’t have the return they expected.

In the short term, the Legislature can’t do much to help people like the Longs, Bivins said, but it’s an issue he’ll look into during the next session.

State Rep. Tom Demmer, R-Dixon, said the increase the Longs face is too much.

“I would agree that something needs to be done in a case like that,” he said. “It seems absurd.”

The Department of Insurance wasn’t able to answer questions this week.

Long said he isn’t looking to be vindictive, but said he and his wife will now have to make a difficult decision about what to do and what’s the best way to protect their assets and ensure quality care in the future.

The Longs can appeal to the Department of Insurance, but that process takes between 30 and 90 days, long after they’ll have to make a decision.

Overall, Long wants to raise awareness about something he and his wife don’t think is right.

“A policy goes from $177 to [$346], you feel like there’s some larceny in somebody’s heart,” he said.