In one of your answers, you suggested looking into buying a small plan from an insurance company to supplement the insured’s CalPers plan and to decrease the benefits on the CalPers plan when there is another rate increase. That is exactly what I’d like to do. I have reduced my lifetime protection to 10 years and am looking at modest plans to supplement the CalPers plan. However, even though I have been paying CalPers LTC premiums from almost the first day of its inception, CalPers is telling me that my CalPers plan would always be secondary to the new plan. And, the LTC insurance broker is telling me that the plan that has been in effect the longest would be the primary. What can I do in this situation?

That is an excellent question. Even though that’s unusual, I don’t see any problem with it operating that way. It would be like having a primary and secondary health insurance that many couples have, or with Medicare, Medicare pays first and a Medicare Supplement pays 2nd.  You would file the claim with the new policy and then send the Explanation of Benefits to CalPers when you file with them so CalPers could pay the balance up to the benefit level you have with CalPers.  However, you want to compare what it would cost you at your current age to buy a supplemental policy vs. accepting the CalPers rate increase. LTCI costs a lot more now plus you are older. If you do pursue a supplemental policy, you might like a plan that pays at least part of the benefit in cash so you can use the money however you need it without providing proof of services. Some companies that allow a partial cash benefit in California are MedAmerica’s FlexCare product (50%) Transamerica’s TransCare II (30%) and  John Hancock (15% in addition to the regular benefit).

I did confirm that CalPers does indeed intend to be secondary to anything except MediCal (Medicaid), so your CalPers contact is correct. You can look this policy language up in your CalPers policy…should be under Exclusions…but here’s the gist of it:

“We will not pay benefits which (1) duplicate payments from any insurance coverage or (2) are payable under Medicare or would be payable….etc. We will pay the difference between Your actual expenses and the benefits payable by all other sources (except…MediCal/Medicaid…), but our payments will not exceed the amount we would have paid in the absence of other coverage. ….”

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