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The health maintenance organizations (HMOs) are on the verge of a revolution in long-term care insurance: The supervisor of insurance is considering making collective insurance personal. The change is expected to significantly increase long-term care insurance costs, particularly for older clients. Some four million people currently have such insurance.

The current, collective set-up calls for the HMOs to buy insurance from a private insurer for all its clients. The advantage is that the HMOs can obtain rates that are half or a quarter of what individuals would pay. The downside is that young people are subsidizing older members.

Another disadvantage is that the policy is renewed every three or four years. Long-term care insurance prices rose hundreds of percentage points in recent years, so policy renewal exposes members to deteriorating conditions and sharp price increases.

The new arrangement will still allow HMOs to buy insurance collectively, but individuals will purchase their policies based on their personal health profile. Individuals will also be able to amass insurance rights, such that those who suspend payments will have their rights preserved. Nevertheless, the reform will lead to much higher prices, especially for older members.