Reports are coming in from around the Web that a nightmare scenerio for policyholders has occured : their plans have been transferred into a state trust managed by the Pennsylvania insurance commissioner.  For certain Conseco policyholders, this is potentially bad news.  What it highlights above all is the need to carefully select a policy that is offered by a financially strong company, and a policy that is part of a large pool of LTC policies.  Conseco has had problems for the past two years and this final step was the final nail in the coffin.

What Will Happen to Affected Policyholders?

For the 140,000 people who have affected policies, it is not cut-and-dry as to what will happen.  The underlying problem is that these policies were underpriced to begin with. Because of that, claims being paid out exceed the premiums coming in.  Simple economics would suggest that in order to make these plans whole, rates need to increase, or the entire plan can go bankrupt.

This entire situation underscores the need to compare LTC plans not simply on rates, but on company ratings, size, and strength as well.  We also suggest that policyholders plan on the possibility of future rate increases.