When long-term care insurance first became available in the 1970s, companies had limited information on how to price this new type of insurance so that they could pay claims decades into the future. Some companies assumed that a significant percent of people would drop their policies at some point, like they do with life insurance. Years later, more policyholders than expected had kept their policies. Policyholders are also living longer, meaning they are using more benefits. Decades later, as policyholders file more claims than anticipated, companies realize that they need to raise rates.

In mid-2011, the Oregon Insurance Division received requests for average premium increases generally ranging from 5 percent to 50 percent. These requests involved policies sold before 2006, when Oregon required companies to price long-term care policies using more current data. Some companies now have more than 20 years worth of claims history and are more accurately pricing the policies they sell today. However, there are no guarantees to buyers that premiums will remain the same during their lifetime.

In 2006, Oregon made changes requiring companies to price long-term care insurance more conservatively by building a margin into the initial rate. Today, company actuaries must certify that premiums will cover anticipated costs over the life of a policy, even under "moderately adverse conditions." Moderately adverse conditions could include below average returns on investments. The division also requires that the companies or agents that sell long-term care insurance disclose certain information to consumers, including a company's rate history and the fact that premiums may increase over time.

In June 2011, the division convened a work group of consumer and industry representatives to seek input on a variety of long-term care insurance issues, including pending requests for significant rate increases. There was strong sentiment that consumers be better informed of any rate increases that might be approved in phases. This would enable consumers to decide early on if they can afford premium increases that might be phased in over several years.

Your age and the benefits you select are key factors in determining how much you pay for long-term care insurance. For example, will your policy pay a daily benefit for two years worth of coverage or for the rest of your life? How long must you wait (the elimination period) before your policy starts paying? Do you have inflation protection? Also, your price may vary based on your health rating (preferred, standard, sub-standard). Many companies will offer couples discounts.

No. Once you buy a policy, rates will not increase based on your own age or health. However, rates may go up for other factors. For example, if all the consumers with your policy are submitting more claims than expected, you would likely see a rate increase.

In many cases, you can lower benefits to keep the price of your policy down. For example, you may be able to reduce the daily or monthly amount your policy will pay or the number of years you will have benefits. Or, you might be able to increase the number of days you would have to wait (the elimination period) before the policy starts paying benefits. Some companies allow you to select reduced inflation protection coverage. Inflation protection helps guard against increases in the costs of care. Another option in many cases is to stop paying premiums but get benefits equal to the premiums you have already paid. Your policy will outline your options or you can call your company to ask about your choices.

Some older policies only covered nursing home care but they are priced accordingly. Today's policies that offer more comprehensive coverage - covering assisted care facilities, adult foster care, and home care as well as nursing homes - also cost considerably more. If you have a policy that only covers nursing home care, you must weigh the costs and benefits. The U.S. Department of Health and Human Services says that about 70 percent of people over age 65 will require at least some type of long-term care during their lifetime and more than 40 percent will need care in a nursing home for some period of time. The typical yearly cost of a semi-private nursing home room in Oregon in 2011 was $80,300.

You should not purchase any long-term care insurance if you currently receive or may soon receive Medicaid benefits, if you have limited assets and can't afford the premiums over the lifetime of your policy, or if your only source of income is a Social Security benefit or Supplemental Security Income.