The Long-Term Care Premium Can Rise After You Buy. Find the Rate Clause and Your Choices Before the Notice

The premium on a long-term care policy is the bill that can grow for years after you sign. Many policies allow the insurer to raise rates on a whole group of policyholders when its costs and claims run higher than it priced for. The increase arrives as a letter, and that letter often leaves the decision to you. Before the next notice comes, find out what your contract says, what choices it gives you, and how much time you have to act.

Local option: New Plan Care gives families in the St. Louis area in-home help so a parent can stay home: companionship, help with bathing and dressing, meals, and overnight care. Call (314) 405-0887.

Pull the contract and the rate history

Find the original policy, the schedule page that lists your daily benefit and benefit period, and every rate-change notice since you bought it. Look for the premium-change clause. Check whether the insurer can raise rates only for a class of policies, whether the change must be filed with the state, and how many days of written notice you get. If the contract is silent on any of this, write that down and ask the insurer to point to the language.

Name what drives the premium

Most of the price comes from a short list: your age when you bought the policy, the daily benefit amount, the benefit period in years, the elimination period you chose, whether you added an inflation rider, whether you pay monthly or annually, and whether a discount such as a joint policy applies. Each one moves the total. An inflation rider that raises your benefit over time usually raises the premium as well, so ask the insurer for the premium with the rider and without it. Do not assume a rider is free to drop without losing something you need.

Ask for the choices in writing

When an increase is announced, most policyholders have some choice. Ask the insurer in writing which of these your contract allows: keep the same benefits at the higher premium, reduce the daily benefit or the benefit period to hold the premium near its old level, or stop paying and convert to a reduced paid-up benefit if the contract offers one. Ask how long you have to choose and what happens if you say nothing. Do not let the policy lapse until you have that answer in writing, and ask whether a grace period applies. Medicare does not pay these premiums, so the family's own budget is the line that has to hold.

Check what the tax line can and cannot do

Premiums for qualified long-term care insurance may count toward medical expenses if you itemize, and the amount that counts depends on your age and on the IRS limits in the year you file. Ask your tax preparer, or read the IRS guidance on medical expenses when you file, before you assume the premium is deductible. A deduction lowers your tax bill. It does not lower the premium the insurer sends you.

Know where the reading becomes a legal question

You can read the premium-change clause and compare the choices yourself. If a rate notice is disputed, if the contract language is unclear on a point that costs real money, or if the insurer will not explain a rate change in writing, the question has moved into a lawyer's territory. The Missouri Bar's referral resources can point you toward a lawyer who handles insurance or elder matters. Before that step, look at Local Help With Paying for Care for the local offices that answer benefit questions, and at Sources for the public references behind this guide.