#31 – Time To Be Like Andy Dufresne

Mar 21, 2025

I am a fan of old movies. There are some I can watch over and over and never get tired of them. On of my favorites is the 1994 film, The Shawshank Redemption, based on a Stephen King novella, “Rita Hayworth and Shawshank Redemption.

The protagonist in the film is Andy Dufresne (played by Tim Robbins), who was wrongly convicted and jailed for murdering his wife. At one point in the movie, Andy is put in charge of the prison library, which has been neglected for years. He starts writing a letter to the state government, every week, requesting updated books and records for the library. After six years, he finally received boxes of new material for the library which included a letter that basically said, this should satisfy your request and we expect this closes this matter.

A prison guard, amazed that Andy finally got a response asked, “what are you going to do now?” Andy replied; “Now I’ll send two letters a week.”

What is the point of all this? I’m glad you asked.

Over the past several weeks, there has been a tremendous amount of activity and progress in my fight to bring meaningful relief to Connecticut Lon-Term Care Insurance (LTCI) policyholders, who have been punished for years by punitive rate increases, given to the insurers.

Along with my colleagues, Ken Kollmeyer and Jan Kritzman, we have sent hundreds of emails, spoken to countless legislators, evaluated numerous proposed bills and spent hours at the Legislative Office Building in Hartford, to speak at public hearings about the pros and cons of the limited bills that were raised by committees for consideration.

Last week, three of those bills were been successfully voted out of those committees, and will now move to the State House of Representatives and State Senate for a full vote of those bodies. One additional bill was voted out of committee earlier this week.

The bills that are up for these important votes are:

· Substitute Bill 1269, AN ACT CONCERNING LONG-TERM CARE INSURANCE introduced by and voted on by the Insurance and Real Estate Committee,

Bill 1420 – AN ACT CONCERNING THE CONNECTICUT PARTNERSHIP FOR LONG-TERM CARE, introduced by and voted on by the Human Services Committee
Bill 1278, AN ACT CONCERNING LONG-TERM CARE INSURANCE PREMIUM RATES, introduced by the Aging Committee and voted on by the Insurance and Real Estate Committee,
Substitue Bill 7183 - AN ACT CONCERNING THE REGULATION OF LONG-TERM CARE INSURANCE AND REPORTS CONCERNING SUCH INSURANCE, introduced by and voted on by the Government Oversight Committee.

I think it is highly unlikely that all four bills would get the votes needed to send them to the Governor for signature. It is also unlikely that these four bills will somehow get merged into a single final bill.

Having reviewed all four bills, I think the two strongest are Bill 1269 from the Insurance Committee, and Bill 1420 from the Human Services Committee.

These bills are long and complicated and not the most interesting things to read. Instead, let me highlight the major points that I believe will help the policyholders.

Bill 1269

This is a very long and complicated bill and it is hard to extract all of the changes without losing the context but here is a summary

Effective January 1, 2026, and applicable to taxable years commencing on or after January 1, 2026, any eligible taxpayer shall be allowed a credit against the tax imposed in an amount equal to twenty per cent of the premiums paid for a long-term care policy. As used in this section, (1) "eligible taxpayer" means any resident of this state with a federal adjusted gross income of less than two hundred thousand dollars.

There are some changes to the current statute also removes some of the current language about rate increases.

Bill 1269 removes the old language that states that for any rate increase that is for twenty per cent or more shall spread the increase over a period of not less than three years and not file a rate filing for another increase during that period.

That language is replaced with this new language that says an insurance company shall not request in such filing an increase in premium rates for such long- term care policy that exceeds ten per cent.

This is a huge benefit to policy holder as it stops these massive multi-year rate increases that have caused the LTCI premiums to explode. Putting a 10% cap would bring real and manageable relief to policyholders.

But it gets even better.

New language added to the statute says:

Any insurance company, that files a rate filing for an increase in premium rates for a long-term care policy shall not request in such filing an increase in premium rates for such long-term care policy that exceeds the most recent calendar year average in the consumer price index for urban consumers, as published by the United States Department of Labor, Bureau of Labor Statistics, provided the certificate holder of such long-term care policy has held such long-term care policy for not less than fifteen years.

For the 2024 calendar year the average in the consumer price index (cpi) for urban consumers, as published by the United States Department of Labor, Bureau of Labor Statistics was 2.9%.

Taken together, this new language says that the most increase a LTCI company can get in 2025, for a rate increase is 2.9%. The language above that, is a fail-safe. Should the average cpi ever exceed 10%, the bill still caps the increase to 10%.

This may be the strongest language in a LTCI bill in years, to make it out of committee.

Bill 1420

Here are the highlights of that bill.

Not later than October 1, 2025, the Secretary of the Office of Policy and Management shall file a report, in accordance with the provisions of section 11-4a, with the joint standing committees of the General Assembly having cognizance of matters relating to aging, human services and insurance and real estate on the feasibility and effect on access to long-term care insurance of a requirement that issuers of long-term care insurance policies provide policyholders an opportunity to cancel such insurance and obtain full refunds of any premiums paid since the start of the policies whenever such issuer files for rate increases that exceed the rate of inflation.

My hope would be that this report will lead to a requirement that insurers must offer that return of premium as an option to all policyholders.

Insurance companies cannot tie executive compensation to approval of higher rates for policyholders.

An insurance company shall, as part of any long-term care policy rate increase request, provide details of any and all reinsurance contracts associated with the policy at issue, including, but not limited to, participation percentage of each reinsurer, by date of contract.

An issuer shall file an annual report, not later than January fifteenth, with the Insurance Commissioner on incurred losses and actual paid losses for each long-term care policy issued in the state.

Taken together, these bills will finally bring relief to policyholders and rein in the abusive behavior of the LTCI industry and put pressure on the Connecticut Insurance Department to stop favoring the industry over the policyholder.

So, it’s time we all be like Andy Dufresne. Whether it’s one letter a week or two letters a week, or a phone call to their offices and a letter email, we need to let our state legislators know we need them to support these bills, vote yes, and convince their colleagues in the State House and Senate to vote YES for these bills.

If you don’t know who your state legislators are, need their email addres or you have other questions, feel free to write to me at ltcicrisis@gmail.com.

We have made more progress this year than in many prior years. Now is the time to turn up the pressure. Let’s take action that would make Andy Dufresne proud.

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Long-Term Care Insurance Crisis

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