ROCHESTER, N.Y. — Thousands of couples in New York like Dom and Anita Palozzi are facing an impossible choice: pay a long-term care insurance premium they can’t afford or lapse insurance they’re banking on.
At 79, Anita Palozzi is still working. She met her husband Dom 55 years ago.
“And two months later we got married,” Anita said.
The Palozzis bought long-term care insurance to protect their assets and more importantly their children. 25 years later they got a letter. Over four years, Anita’s annual premium goes from $1,312.37 to $3,668.14. Dom’s spikes from $1,780.09 to $975.50.
Anita Palozzi, facing $5,000 increase in long-term care premium: “Which is 179% increase.”
Berkeley Brean, News10NBC: “Can you afford that?”
Anita Palozzi: “No. But here’s the deal. I might have to because I’ve already invested $60,000 in premiums.”
The Palozzis’ insurance company submitted its application to raise rates before the state required them to be published. But the applications for 2024 and this year show the increases are double sometimes triple digits. Every single insurance company says there are more claims, people are living longer, it costs more and they need the money to pay future claims.
See the insurance companies rationales below
Berkeley Brean: “I see numbers like 24%, 44%, 174%, 252%. I don’t know how anyone thinks anyone can afford that.”
Sen. Shelley Mayer, (D) Chair, Senate Insurance Committee: “I totally agree with you.”
Senator Shelley Mayer is the chair of the Senate Insurance Committee. When people like the Palozzis get letters like this, it means the state approved the increases.
Berkeley Brean: “So the state is saying, that that increase is okay.”
Sen. Shelley Mayer: “Correct. I’m not going to speak for them because all I do is fight with them but what I will say what (the Department of Financial Services) would say and the insurance companies would say that this is not a product that they can price appropriately anymore.”
And if the company doesn’t get the increase, it could leave New York.
Sen. Mayer sponsors a bill that creates a universal long term care insurance funded by what she calls a “modest payroll tax” paid by employers. It’s based on the model in Washington State. Bill S.1179 has not made it out of the state senate health committee.
Mayer has another bill, S.8473, that starts a study of long term care insurance in New York.
When Anita bought her long-term care policy two decades ago, she was an insurance agent.
“I’m not doing this just for us. I’m doing this for all the clients I sold this to. To my family members I sold this policy to. They’re all getting these letters too,” Anita said.
There’s a 20% tax credit on premiums, so New York State effectively pays $2 for every $10 in premiums charged. Premium money is also protected by law in New York. So if Anita Palozzi lapses her policy, she’s entitled to the $60,000 she’s already paid.
Insurance comes under the state Department of Financial Services. In an email, the department wrote: “The stability of the long term care insurance market is a nationwide issue. A 2023 report issued by DFS showed that long term care insurers are struggling nationwide to remain solvent. The market nationwide is in crisis due to historical mispricing, which has led to ever-increasing premium rates and insurers leaving the market. When reviewing insurer rate filings, DFS is required by law to ensure rates are actuarily justified and to ensure that insurers remain solvent so that policyholders get their claims paid when they need it. In many cases the Department has worked with insurers to ensure rate increases are implemented over a multi-year period to mitigate cost increases to policyholders in this troubled market.”
Here are examples of insurance company rate increase applications, the number of customers in 2024 and 2025 and the rationale behind the requests:
2025
Mutual of Omaha
5,872 customers
Proposed Rate increases:
24.1%
“This increase is needed because premiums are no longer adequate to cover the rising claim costs due to changes in policyholder behavior including higher-than-expected claims incidence and longer claim durations. In other words, more policyholders are recognizing the benefit of their long-term care insurance policies, using benefits more often and for a longer duration than anticipated.”
John Hancock
Proposed Rate increases:
44.9%
47.5%-50.8%
66.8%
55.8%
“The new data demonstrates lower mortality for non-claimants, higher utilization of benefits, and longer claims, partly offset by lower claim incidence. Based on that data, as well as data from prior studies as applicable, we have determined that there is a need to increase premiums in order to meet future claims obligations.”
Genworth
23,602 customers
Proposed Rate increases:
99%
252%
35%
174%
“Obtaining premium rate increases is important to GLICNY’s ability to pay future claims.”
Prudential
2,119 active New York GLTC4 certificate holders
Proposed Rate increases:
20%
“Prudential determined that a premium increase is needed to help ensure that future premiums, in combination with existing reserves, will be adequate to fund these anticipated claims.”
“…for every $1.00 in premium received we expect to pay $0.92 in claims.”
2024
MedAmerica Insurance Company of New York
Proposed Rate increase:
95%
First Unum Life Insurance Company
7,752 customers
Proposed Rate increase:
96.7%
“LTC claims experience trends are emerging differently than originally
priced. The factors driving the Company’s need for premium increases are the same as those
impacting the LTC industry, with our experience developing unfavorably for key pricing
assumptions:
– Lower than expected lapse rates
– Continued mortality improvements (e.g. people living longer)
– Increasing claim durations
In conclusion, the Company has deemed this premium adjustment necessary to meet future claim
obligations.”
The post News10NBC Investigates: Double and triple-digit premium hikes force New York couples to make tough decisions on long-term care insurance appeared first on WHEC.com.
