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Actuaries for Blue Cross Blue Shield of Nebraska say a block of 2,880 long-term care insurance (LTCI) policies the company sold from 1998 through 2004 has performed so poorly that, if the company were seeking to achieve a loss ratio of 60%, it could justify a request for a 1331% rate increase.
Increasing the premiums by 1331% would mean that premiums would be about 14 times higher than they are today.
Instead, Nebraska Blue asked for increases that could average about 247% for the 1,853 people who still have their coverage in force, according to a rate increase application cover letter signed by Matthew Morton, an actuary at LTCG.
Increases could average 168% for 546 holders of one LTCI policy form who chose limited benefits, 243% for 628 holders of that form who chose lifetime benefits, 227% for 254 holders of another form who chose limited benefits, and 347% for 407 holders of the second form who chose limited benefits, according to an actuarial memorandum.
The original memorandum shows the original rate proposal would, for example, have increased the rates for the 546 holders of the one form, with limited benefits, to $3,281 per year, from $1,224 per year today. The 628 holders of a version of that form with lifetime benefits could have seen their premiums increase to $4,791, from $1,397.
