(Adds that Unum stopped offering new policies)
By Suzanne Barlyn
Jan 12 Florida's insurance commissioner is
allowing MetLife Inc and Unum Group boost
long-term care premiums, alleviating financial stress the
insurers have been facing from rising medical costs and
policyholders living longer.
MetLife's Florida subdivisions can increase average monthly
premiums by $4 to $44 over the next three years, while two Unum
units can raise them by $5 to $55, Insurance Commissioner David
Altmaier said on Thursday.
Increases will be phased in during an initial three-year
period, beginning this year. Rates will be guaranteed for an
additional seven years with no further increases, Altmaier's
The agreements come at a difficult time for the long-term
care insurance industry. Insurers must make good on policies
written during the 1990s and later, when they significantly
underestimated projected health-care costs and life spans.
"MetLife determined that a rate change on certain long-term
care insurance policies was necessary due to cumulative changes
in actuarial assumptions since the time these policies were
initially priced," MetLife spokeswoman Kim Friedman said.
A Unum spokeswoman declined to comment.
Insurers have been pushing for U.S. state regulators to
grant rate increases for long-term care policies. Last April,
the Pennsylvania Insurance Department approved rate increases of
between 20 and 30 percent for a total of 46,525 policies in the
Long-term care insurance covers expenses for nursing home or
home care if the policyholder becomes incapacitated. Most of
those expenses are not covered by Medicare, the U.S. government
insurance program for the elderly and disabled, and can be
extremely expensive out of pocket.
The median annual cost of a private U.S. nursing home room
last year was $92,376, according to Genworth Financial Inc
People over age 60 make up nearly 23 percent of Florida's 19
million residents, according to the Areawide Council on Aging of
Broward County Inc.
Still, the impact of Florida increase and long-term care
market overall is small for MetLife, given the company's
diversified business lines, said Sandler O'Neill analyst John
Unum may feel the impact slightly more, given its position
as a leading provider of disability insurance products, Barnidge
said. But Unum does not have a large business in the long-term
care market, Barnidge said.
Unum said it stopped offering new individual long-term care
policies in 2008 and group policies in 2012.
(Reporting by Suzanne Barlyn; Editing by Lauren Tara LaCapra
and Leslie Adler)