Tag: Lawrence Grossman

CalPERS Devises “Heads I Win, Tails You Lose” Gamble for Long-Term Care Policyholders in Settlement

Mary Pat Campbell
CalPERS Devises “Heads I Win, Tails You Lose” Gamble for Long-Term Care Policyholders in Settlement

Graphic:

Excerpt:

The graphic “Settlement Bet” shows options that policyholders have to choose from in the Settlement. The graphic “Settlement Happens??” shows the consequences of the “Settlement Bets” if the Settlement happens or not.

Policyholders not wanting to terminate their CalPERS policies will select not to participate (“opt out”) in the Settlement (as participation will end policyholders’ policies if the Settlement is approved).

Policyholders whose preference in light of announced rate increases would be to terminate because of the new CalPERS rate increases can be divided into two groups in light of the Settlement options: (1) those that wish simply to terminate and stop paying premiums; and (2) those who wish to terminate but are prepared to gamble with CalPERS to get a refund.

In making these choices, all policyholders are being forced to gamble a lot of money. Why the Settlement is structured as a gamble is unclear, but it is. That seems incredibly unfair to policyholders who can ill afford more financial losses after their losses already caused by CalPERS LTC.

Author(s): Yves Smith, Lawrence Grossman

Publication Date: 23 Sept 2021

Publication Site: naked capitalism

CalPERS’ Long-Term Care Fiasco: Private Burial to Hide Malfeasance, Failure to Implement Legislation

Mary Pat Campbell
CalPERS’ Long-Term Care Fiasco: Private Burial to Hide Malfeasance, Failure to Implement Legislation

Excerpt:

The ongoing CalPERS long-term care insurance program crisis continues to unravel. It is also  revealing overarching behavior which is both unethical and contrary to law.

CalPERS announced insurance premium increases of 52%-90% that become effective very shortly, at the same time that CalPERS has agreed to a class action lawsuit settlement over its last 85% rate increase.  (In my next article I will discuss why I suspect the settlement is another con job by CalPERS.)  But here I first must address a shocking revelation previously unreported about CalPERS long-term care insurance program (LTC) which needs to be recognized before moving on to the issues of the proposed settlement.

There is new and truly disturbing information about the CalPERS long-term care insurance program from a recent review of the enabling legislation prepared by a former California Deputy Attorney General and Court of Appeal Attorney, Linda J. Vogel.

According to Vogel’s analysis, the CalPERS long-term care insurance program  since inception in 1991 has operated contrary to law.

Author(s): Lawrence Grossman

Publication Date: 15 Sept 2021

Publication Site: naked capitalism

CalPERS Long Term Care Program Bleeds Policyholders Dry via 10X Higher Premiums, Gross Mismanagement, Bad Faith Dealing

Mary Pat Campbell
CalPERS Long Term Care Program Bleeds Policyholders Dry via 10X Higher Premiums, Gross Mismanagement, Bad Faith Dealing

Graphic:

Excerpt:

To justify the rate increases, CalPERS asserts that there is nothing problematic with the program, other than the usual suspects of low interest rates and unexpected policyholder behavior, issues that all long-term care providers have faced. But that is, at best, a half-truth.

While all other long-term care providers have faced the same challenges, there is no evidence that any other insurer in the nation has responded with premium increases like CalPERS. For example, the Federal Long Term Care Insurance Program has raised rates as much as 150%. For commercial policies, premiums rose up to 75% for UNUM Group in some states, while in California premiums for Mutual of Omaha policy premiums rose 20%, Transamerica premiums rose 25%, and Thrivent premiums rose about 37%.

During the past two decades, roughly the timeframe of the policies subject to the lawsuit, inflation has risen 49% and the cost of long-term care services about 120%. The chart below shows actual policy rates and the initial policy rate along with inflation and long-term care trends.

Author(s): Yves Smith, Lawrence Grossman

Publication Date: 14 May 2021

Publication Site: naked capitalism