With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.
Our column in today's fiber/cyber Bee examines the contention that CalPERS guaranteed it would never increase premiums for some of its most costly long-term care policies.
We've heard that from dozens of angry policyholders who feel like they were snookered by CalPERS materials and representatives in the 1990s pushing "inflation protection" coverage. The products annually adjust claim benefits to counter rising health care costs. Policyholders bought in despite the comparatively higher cost in the early years of the plans. The premiums, they were told, would remain fixed.
We've never seen any documents that use the word "guarantee" to describe locked-in premiums. Policyholders say insurance representatives freely used the word.
CalPERS officials today distance themselves from those assertions. They say that for years the numbers for those policies haven't added up for several reasons: disappointing investments, higher-than-anticipated claims and loose underwriting.
We've embedded below two pages from an old CalPERS brochure passed our way by a policyholder who enrolled 15 years ago. It uses phrases with some wiggle room, such as premiums for inflation-protected policies "are designed to remain level." Charts compare premiums between a policy without inflation protection and one that does. The same brochure also says premium increases require board action -- and there's no caveat for inflation-protection policies.
The policyholder wrote the notes on the document. We added the highlights.
CalPERS long-term care insurance brochure by jon_ortiz
PHOTO CREDIT: CalPERS headquarters. Jay Mather / Sacramento Bee file, 2005.
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