For more than 25 years, Dan Daddieco and Sheri Craig of Westford, Massachusetts, faithfully paid premiums on long-term care insurance policies they believed would help protect them in retirement.

Now in their 70s, they say that safety net has become unaffordable.

This year, Brighthouse Life Insurance Company notified the couple that their premiums are set to increase by 118.2%, phased in over the next three years. For Daddieco alone, annual premiums would rise from about $4,300 to roughly $9,500 by 2028. Combined, the couple estimates they would pay more than $17,000 a year to keep their coverage.

“We can no longer keep these products because the premiums have been escalated so much that they’re out of reach now for us,” Daddieco told NBC10 Boston Responds.

With no children to help care for them later in life, the couple said they viewed long-term care insurance as a critical part of their retirement plan.

“Basically, we feel like the bottom fell out from what we had planned for, for 26 years,” Craig said. “To have our safety net, it’s gone.”

Sheri CraigSheri Craig

Dan Daddieco and Sheri Craig

What options do policyholders have?

Brighthouse offered the couple alternatives to paying the full increase.

One option would allow them to reduce their benefits in exchange for lower premiums — the resulting premiums would still be higher than what they currently pay.

The other option is a paid-up benefit, which allows policyholders to stop paying premiums and retain a limited amount of long-term care coverage, approximately equal to the amount of premium paid. According to company materials, that option can significantly reduce future policy benefits compared to the original coverage purchased decades ago.

After reviewing the details of the paid-up benefit, Daddieco told NBC10 Boston Responds that he and his wife are now considering that option.

Still, he says knowing what he knows now would have changed his decision years ago.

“We would have never bought the policy,” he said. “We would have fast-tracked our savings to prepare for this day, and we would have been in good shape after 27 years.”

Why are premiums increasing?

Long-term care insurance rate increases require approval from the Massachusetts Division of Insurance.

State filings show Brighthouse initially sought a 315% premium increase for this block of policies. The company argued that the policies are costing substantially more than expected and that future benefit payments are projected to exceed premiums collected from policyholders.

In documents filed with regulators, Brighthouse said the policies are paying out more in benefits than the company anticipated when many of them were sold decades ago.

Massachusetts regulators challenged the filing and eventually negotiated a smaller phased-in increase totaling 118.2%.

In a statement to NBC10 Boston Responds, the Division of Insurance said its actuaries scrutinized the company’s assumptions and projections, including estimates of future claims costs, mortality, lapse rates, investment returns and expenses.

“The DOI and the company agreed to a reduced increase at this time,” the agency said, adding that Brighthouse would have to return with updated information if it seeks additional increases in the future.

The company has already indicated in filings that it may seek future rate increases.

Regulators acknowledge consumer hardship

The Division of Insurance says it understands the frustration many policyholders feel.

“The Division understands why many policyholders feel frustrated and disappointed,” the agency said in a statement. “Many individuals who purchased long-term care insurance decades [ago] thought that premiums would remain relatively stable, and many were not prepared for rate increases.”

The agency noted that substantial increases can create financial hardship, particularly for retirees living on fixed incomes.

“No approved increase is easy, and the Division recognizes the impact these decisions have on consumers. That is why every request receives extensive actuarial review,” a DOI spokesperson wrote in an email to NBC10 Boston.

Not just a Brighthouse issue

A Brighthouse Life Insurance representatives told NBC10 Boston Responds that approximately 1,600 Massachusetts policyholders are affected by the most recent approved rate filing.

Industry experts say the issue is not unique to Brighthouse.

“It’s not uncommon. These typically only happen to older, what they call legacy long-term care insurance policies, policies that were bought 10, 15, 20 years ago. And obviously, a lot has changed in 10, 15, 20 years.” explained Jesse Slome, director of the American Association for Long-Term Care Insurance.

“There were two primary assumptions that were that were made,” Slome added. “The first is interest rates. Nobody would have guessed that we would have had years of historically low interest rates. And that really is what impacted these older policies.”

The second assumption, Slome explained, was around claims and how much they would cost.

“Insurance companies don’t offer lifetime benefits anymore. And today, if you bought a new policy, adding a 5% compound inflation factor typically prices almost everybody out of that market,” he said.

Slome said policyholders should carefully review the alternatives offered by insurers before making a decision.

“The bottom line is the insurance companies give consumers options,” Slome said. “You don’t have to take the option with the full rate increase.”

He said insurers may be willing to work with consumers to tailor a revised plan based on their budget and current needs.

For consumers facing significant rate increases, the Massachusetts Division of Insurance recommends exploring available benefit-reduction options, speaking with their insurer, and seeking assistance from resources such as local Councils on Aging or AARP.

Lawmakers weighing broader long-term care solutions

The challenges facing long-term care insurance policyholders have also drawn attention on Beacon Hill.

State Rep. Thomas Stanley has filed legislation that would establish a special commission to study a statewide long-term services and supports (LTSS) benefit program. Stanley said many Massachusetts residents will eventually need help with activities such as bathing, dressing, preparing meals and managing medications, but relatively few can afford the cost of care.

“Only a small fraction of MA residents holds private LTC insurance, and those unable to pay out of pocket must either rely on unpaid caregivers or spend down their assets to become eligible for LTSS programs under MassHealth. Neither of these approaches are sustainable with shifting demographics shrinking the pool of available family caregivers and estimates that the Commonwealth may lose up to $3.5 billion annually in Medicaid funding starting in 2027. Addressing LTSS affordability will take great collaboration, and the commission established by this bill brings a diverse group of stakeholders together that will recommend a program that works best for the Commonwealth,” wrote Stanley.

The proposal is backed by Sen. Patricia Jehlen, whose office says the commission would use findings from a state-funded actuarial study examining public, private and hybrid approaches to financing long-term care. The study was designed to use Massachusetts demographic data to project the costs of various long-term care financing models and explore ways to expand affordable private long-term care insurance options.

Supporters say the goal is to identify sustainable solutions for middle-class residents who may not be wealthy enough to pay for years of long-term care out of pocket but may also struggle to qualify for public assistance.