Boston-based John Hancock Financial will hike rates for plans covering individuals' in-home and nursing home care by about 20 percent, The Boston Globe reported.
The insurer will notify 5,800 Massachusetts members with long-term coverage that their premium increases will spike immediately. Consumers will be offered options to pay the increase or scale down their benefits.
The double-digit hike will affect a particularly vulnerable older population that is bringing in less income post-retirement and using more benefits.
Rate increases come at a time when healthcare costs are increasing and life expectancy is extended, according to The Boston Globe. The rapid rate increase is a result of John Hancock underestimating how long individuals need care, overestimating incoming interest and the number of people dropping plans before receiving benefits.
In 2011 and 2012, the Massachusetts Division of Insurance approved two rate increases for John Hancock that led to between 18 percent and 23 percent increases for members with long-term coverage. In 2014, another increase affected more than 16,000 Massachusetts members, according to The Boston Globe.
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