Thousands of Maryland seniors could soon be staring down steep new premiums for their long-term care insurance, with proposed rate hikes from four different insurers ranging from roughly 40% all the way up to a staggering 242%. State regulators say the increases, if approved, could affect about 12,600 policyholders across Maryland.
The Maryland Insurance Administration has not made a final decision on any of the proposed increases, according to WJLA. Four insurance companies have filed requests for rate increases on long-term care policies in the state, and the case that stands out most is MedAmerica, which is seeking a 242% increase on policies covering 82 Marylanders. MedAmerica plans to phase that increase in over several years, and has said it will limit individual annual increases to 15%.
John Hancock Life Insurance Company, meanwhile, has requested increases on 19 different types of policies, with proposed average hikes ranging from 27% to 142% depending on the policy type. Like MedAmerica, John Hancock says it will cap individual annual increases at 15% so policyholders are not hit with the full jump all at once.
Why Insurers Say They Need More Money
The insurance companies attributed the proposed increases to a mix of factors: higher-than-expected use of benefits, policyholders living longer than originally anticipated, and changes in financial assumptions including interest earnings. Those pressures are not unique to Maryland. According to the Society of Actuaries, the average requested long-term-care insurance rate increase nationally hit 56% in a 2024 survey, up from 47% in 2021, based on data from 17 companies representing more than 75% of U.S. long-term-care insurance premiums, per the Society of Actuaries.
The most common combination of reasons cited industrywide includes higher-than-anticipated claim incidence, longer-than-anticipated claim continuance, lower-than-anticipated voluntary lapse rates, and improved active life mortality — meaning policyholders are filing more claims, staying on claim longer, dropping coverage less often, and simply living longer than insurers' original models predicted. The same survey found the average approved increase nationally was 28% in 2024, essentially unchanged from 29% in 2021, suggesting regulators nationwide often trim requested increases before signing off.
What Regulators Do Before Deciding
Maryland's review process is not a rubber stamp. The Maryland Insurance Administration's rate-review process includes an actuarial review and a peer review, along with a public hearing, before ending in a final decision. During its review, the agency can approve the requested increases as filed, approve lower increases instead, or take other regulatory action. That kind of layered review is not unusual — other states, including Virginia, Massachusetts, and California, also require insurers to file rate-increase requests with state regulators before any changes take effect, according to the Virginia State Corporation Commission.
Maryland residents can weigh in directly. The state is accepting written comments on the proposed increases, with a deadline of Thursday, September 24. The Maryland Insurance Administration's long-term care page provides additional information on rate requests, hearings, previously approved rates, and consumer resources for anyone trying to sort out how the proposal might affect their own policy.
AARP Maryland's Advice: Don't Panic
Nancy Carr, with AARP Maryland, is urging policyholders not to panic or quickly drop their coverage in response to the proposed hikes. She advised policyholders to consider the proposed increases within the broader context of their retirement planning, rather than making a snap decision.
Carr also urged Marylanders to look at alternatives before giving up a policy altogether just to cut premiums. Policyholders can often reduce the amount of coverage they carry — rather than canceling a policy entirely — to bring the cost down while still keeping some protection in place. That option lines up with what insurers nationally often offer: reduced benefit options, such as lowering the daily benefit amount or shortening the benefit period, as an alternative to swallowing a full rate increase, according to the Society of Actuaries.
The Stakes for Seniors Weighing Their Options
The pressure on these premiums comes against a backdrop of rising costs across the board. Healthcare costs have increased through the years, and long-term care and nursing home staffing costs specifically have climbed over the past several years as well. The math behind why coverage matters is stark: the median annual cost of a private nursing-home room in the United States was $116,800 in 2023, according to KFF.
Part of what makes long-term care insurance valuable is what Medicare will not cover. Medicare generally does not cover long-term services and supports, KFF notes, meaning people who need ongoing custodial care may have to pay directly or eventually rely on Medicaid. Medicare.gov confirms that Medicare does not provide long-term care coverage or custodial care unless medical care is also needed, and even its coverage of skilled nursing facility care is capped at up to 100 days following a qualifying hospital stay — nowhere near enough for someone who needs years of ongoing support.
For now, no Maryland policyholder knows exactly what their premium will look like once the dust settles, since the state has not issued a final ruling on any of the four companies' requests. What is clear is that the review process — actuarial scrutiny, peer review, a public hearing, and the September 24 comment deadline — gives Marylanders a window to make their voices heard before regulators decide how much of these hikes, if any, ultimately sticks.
