|Date:||August 25, 2016|
|Source:||WFTV 9 ABC|
ORLANDO,Fla. - An Orange County family said huge rate increases will force them to cancel insurance, long before they need it.
Their long-term care insurance premiums could nearly double in just a year, and a wave of rate hikes could force customers to lose thousands in premiums they already paid.
“Every time I get a bill, it says, ‘Congratulations! You have wonderful protection through MetLife,’” said MartaDiMarcantonio.
DiMarcantonioand her husband signed up for MetLife for long-term care insurance in 2004.
They bought in early for low premiums to cover in-home care or nursing homes later.
Then a month ago, DiMarcantonio received a notice she wasn’t expecting.
“It was very alarming,” saidDiMarcantonio.
MetLife wants Florida to approve a 95 percent rate increase. In a single year, their premium would soar from $1,600 a year to more than $3,000.
“Outrageous. So I immediately began researching if I had an option,” saidDiMarcantonio.
Canceling the policy means losing $26,000 in paid premiums.
“I know they're trying to squeeze me out,” said DiMarcantonio.
Action 9 started tracking controversial long-term insurance rate hikes four years ago. Several big insurers have followed.
GeorgeTiedmannof Orlando canceled after paying 10 years when John Hancock socked him with a 35 percent hike.
“It totally shocked and floored me,” saidTiedmann.
The increases are driven by low returns on insurance investments and policy holders are living longer.
“They had made some bad assumptions that we would die off and not need these policies and we haven't,” saidDiMarcantonio.
Action 9 checked Florida records and found insurance companies requested 22 long-term rate hikes in just three years. The biggest approved was 35 percent.
“Now years later, after paying premiums into it, they're seeing very big increases. So I am concerned,” said Florida’s insurance consumer advocateSha’RonJames.
DiMarcantoniosaid even if Florida limits the hike, MetLife will be back for more.
“The increase should not be permitted,” said DiMarcantonio.
MetLife told Action 9, customers can chose to decrease future benefits to limit premium increases. It said hikes are necessary because original assumptions about life expectancy have changed.
The long-term care insurance industry as a whole is facing challenges as a result of evolving actuarial assumptions on pricing, and MetLife is no exception. Following an extensive review of its LTCI business, MetLife has determined that a rate change on certain long term care insurance policies is necessary due to cumulative changes in actuarial assumptions since the time these policies were initially priced.
MetLife continues to offer ways to mitigate the impact of rate increases through the use of benefit decrease options.