CalPERS Warns Retirees: Premiums for Long-Term Care to Skyrocket
The California Public Employees Retirement System, also known as CalPERS, has put roughly 60,000 retirees on notice that they face a steep increase in premiums for long-term care insurance.
Now, a California State Assembly committee is looking into the causes of the premium spike.
CalPERS told policyholders they face a five percent increase on premiums this year and next year -- and an 85 percent increase over two years starting in 2015. The insurance covers lifelong nursing-home care or in-home care. Policyholders can avoid the increases if they opt for limited-term plans.
The Assembly Committee on Long-Term Care and Aging heard from policyholders on Tuesday. A woman who declined to give her name echoed the feeling of many that the plan has been mismanaged.
"When I bought the plan in 1995," the woman testified before the committee, "I feel that I was the victim of fraudulent practices."
CalPERS says the changes are needed to make their long-term care program solvent.