What do LTC policyholders do when faced with large rate increases?

We know several LTC insurers have gone through some recent in-force premium adjustments.  Since these are private insurers dealing with consumers, insurers do not have to share how policyholders react - i.e. drop coverage, reduce benefits, or swallow the increase.

However, we do have data on the federal long-term care program which insures over a quarter of a million Americans.  When large premium increases where necessary, a study found that an extremely small percentage (less than 2%) lapsed coverage.  Less than 1% reduced benefits.  Almost 46% took the premium increase, and the remainder adjusted their inflation coverage from 5% to 4% compound.

To read more, view this excellent press release from the AALTCI.org

http://www.aaltci.org/news/long-term-care-insurance-association-news/study-examines-long-term-care-insurance-rate-increases

Here's a link to the complete GAO study:  http://www.gao.gov/new.items/d11630.pdf