Financial loss

While long-term care insurance options continue to diminish, a new industry report finds a huge spread in costs for virtually identical coverage plans.

The American Association for Long-Term Care Insurance on Monday released its 2019 price index. It notes that a couple in their mid-50s purchasing such coverage can expect to pay an average annual premium of about $3,000 for combined benefits of $770,000, if they start needing care at age 85.

Director Jesse Siome noted the gap between the lowest and highest cost for virtually identical coverage was as high as 243% for 55-year-olds.

“This is the largest spread I can recall in recent years,” he said in an announcement. “It’s rare to see one policy costing more than twice another policy when both are large insurers, but each company gets to set their own pricing and each has their own target market.”

A single male in his mid-50s could expect to pay an average annual premium of about $2,000, while a female would spend $2,700, according to the index.

The Pittsburgh Post-Gazette reported Monday that Virginia-based Genworth has lost about $3.1 billion from its long-term care policies, and has asked state agencies for approval to raise rates an average of 53%.

Beyond Genworth, the market for long-term care insurance market has dwindled in recent years. About 100 companies offered standalone policies in 2002 nationwide, which has dropped to 17 today.

“The industry has been imploding because they sold a ton of policies and they mispriced them,” Richard Sabo, principal of RPS Financial Solutions, told the Gazette.  “They have a financial mess.”