This article covers the mechanics of issue age rating and pre-funding to clarify some of the common misconceptions about long-term care (LTC) rate increases. It also discusses how misses in some of the key pricing assumptions drive the need for a rate increase. While understanding the background behind an LTC rate increase may not make increases more palatable, there is cause for optimism.
This article originally appeared in the August 2014 issue of Long Term Care News, a newsletter published by the Society of Actuaries.