The California Public Employees' Retirement System (CALPERS) will be increasing rates for some holders of its older long-term care insurance (LTCI) program policies by 85 percent.
The increase will be spread over two years and take effect in July 2015, according to the CALPERS board.
LTCI coverage holders can cut the increase to 79 percent by taking the increase in a single year, the board said.
The increase will affect policies with lifetime benefits, with or without inflation protection, that were sold from 1995 to 2004, the board said.
The board is excluding policies sold through the California Partnership program, which gives consumers the ability to coordinate private LTCI benefits and Medicaid nursing home benefits, from the increase.
"The premium increase is necessary to offset the effect of higher-than-expected claims, lower-than-expected investment income, the board’s adoption of a more conservative LTC fund investment mix, and a lowering of the fund’s investment discount rate to 5.75 percent to align with the more conservative investment portfolio," officials said.
CALPERS will give LTCI policyholders the ability to hold down premium costs by converting to other types of policies, the board said.
The policy changes for policyholders who choose the conversion options would take effect in July.