Connecticut lawmakers are reviewing two bills that could reshape long-term care (LTC) insurance regulations by imposing a four-year rate freeze, increasing transparency, and introducing automatic hearings for certain rate increase requests.
Senate Bill 452, introduced by Sen. Saud Anwar (D), proposes a four-year freeze on LTC insurance rates and mandates public hearings for any requested rate increases exceeding 5%, according to the bill’s text. Policyholders facing annual rate increases above that threshold would also be eligible for a tax deduction under the proposed legislation.
Senate Bill 1269, introduced more recently, would require the Connecticut Insurance Department to examine the feasibility of an alternative risk pool for LTC policyholders who have maintained their coverage for over 20 years. The bill also directs the department to review the LTC rate filing process and issue a report on potential reforms.
Under SB 1269, insurers would be required to provide written notice to prospective policyholders detailing potential future rate increases before a policy is sold. The bill also proposes a tax credit for eligible LTC insurance purchasers.
Connecticut's LTC insurance landscape has experienced notable developments recently, encompassing regulatory changes, financial statistics, and diverse perspectives on existing laws.
Between January 2019 and October 2024, over 17,000 LTC policyholders in Connecticut experienced premium hikes of 50% or more. Notably, in 2022, Genworth Financial implemented rate increases averaging 97%, with some as high as 173%.
Approximately 100,000 Connecticut residents hold LTC insurance policies, which cover services such as in-home care, assisted living, and nursing home stays.
Anwar described his proposal as the broader of the two, though SB 1269 has advanced further in the legislative process. Anwar said the most urgent priority for lawmakers is the four-year rate moratorium, arguing that it would force a reassessment of the LTC insurance market.
"We need to pause everything that’s happening and how the insurance industry is abusing our seniors and the community who is on a fixed income," Anwar said in a report from AM Best.
The senator argued that a moratorium would bring all stakeholders to the table to develop a model for addressing LTC insurance issues, which extend beyond Connecticut. The industry has faced significant challenges due to underwriting miscalculations in the 1990s and 2000s, rising medical costs, an aging population, and longer lifespans, according to state and federal regulators.
Public hearings on rate increases represent another key provision of SB 452, Anwar said, noting that insurers currently have the ability to raise rates without direct public oversight.
"It’s important to shine a light on that (rate-setting) process," Anwar said.
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