Connecticut Considers Measures to Curb LTC Insurance Costs
Connecticut lawmakers are currently reviewing two key bills that could significantly reshape the state’s long-term care (LTC) insurance landscape. The proposed legislation addresses concerns about rising premiums through a potential four-year rate freeze, increased transparency requirements, and the introduction of automatic public hearings for certain rate increase requests.
Key Bills Under Consideration
Senate Bill 452, spearheaded by Senator Saud Anwar (D), proposes a four-year moratorium on LTC insurance rates. The bill also mandates public hearings for all proposed rate increases exceeding 5%. Furthermore, the legislation suggests a tax deduction for policyholders facing annual rate hikes above this threshold. According to the bill’s text, this measure aims to provide financial relief to consumers.
Senate Bill 1269, introduced more recently, directs the Connecticut Insurance Department to assess the feasibility of an alternative risk pool for LTC policyholders who have maintained coverage for over two decades. This second bill also instructs the department to review the current LTC rate filing process and issue a report outlining potential reforms. If enacted, SB 1269 would require insurers to provide prospective policyholders with comprehensive written notice detailing potential future rate increases. The bill also includes provisions for a tax credit for eligible LTC insurance purchasers.
Addressing a Challenging Market
Connecticut’s LTC insurance market has seen considerable volatility in recent years. Between January 2019 and October 2024, over 17,000 LTC policyholders in the state experienced premium increases of 50% or more. A particularly striking example is the 2022 rate increases implemented by Genworth Financial, which averaged 97%, with some reaching as high as 173%.
Currently, approximately 100,000 Connecticut residents hold LTC insurance policies. These policies provide coverage for crucial services such as in-home care, assisted living, and nursing home stays. Senator Anwar described his proposal, SB 452, as the broader of the two bills, although SB 1269 has advanced further in the legislative process.
Senator Anwar emphasized the urgency of the proposed four-year rate moratorium, arguing that it is essential to facilitate a comprehensive reassessment of the LTC insurance market. “We need to pause everything that’s happening and how the insurance industry is abusing our seniors and the community who is on a fixed income,” Anwar stated in a report from AM Best. He contends that a moratorium would bring all stakeholders together to develop a sustainable model for addressing LTC insurance challenges, which are not unique to Connecticut.
Industry challenges include the consequences of underwriting miscalculations in the 1990s and 2000s, rising medical costs, an aging population, and increased longevity. Public hearings on rate increases, another core provision of SB 452, would address the lack of direct public oversight over insurers’ current ability to set rates. “It’s important to shine a light on that (rate-setting) process,” Anwar said.
