The Genworth 'Special Election' Letter, Decoded

If a Genworth envelope stamped "Special Election" has landed in your mailbox, set aside a moment before you file it away. It is not a bill, and it is not a refund check. It is the product of a class-action settlement — and buried in its dense paragraphs is something Genworth spent years not telling policyholders: the company intends to keep raising your premium, on a schedule, for years to come.

The letter looks like a gift. It offers you a menu of "options," sometimes a cash payment attached to one of them. But the choices are not equal, and at least two of them can quietly erase protections you paid decades to build — including, for the wrong policyholder, the Medicaid asset shield that may be the single most valuable feature of the policy. Here is what the letter actually is, which of three separate lawsuits produced yours, and what each option trades away.

What the letter really is: disclosure, not a rollback

Between 2019 and 2023, Genworth settled three separate class actions in the U.S. District Court for the Eastern District of Virginia — Skochin, Halcom, and Haney. All three made the same core allegation: that Genworth knew, internally, how large and how frequent its future long-term care rate increases would be, and withheld that from policyholders who were making irreversible decisions about whether to keep paying.

Read that carefully, because it defines the whole shape of the relief. The suits did not challenge Genworth's legal right to raise premiums. Long-term care rate increases are filed with and approved by each state's Department of Insurance; a court cannot wave them away, and these settlements didn't try. What the plaintiffs won was disclosure — a court-ordered "special election letter" in which Genworth must, in its own words, lay out its multi-year plan to keep raising rates and explain why. In exchange for that transparency (and a menu of election options), class members give up the right to sue over the non-disclosure.

So the letter's real message is not "here is a benefit." It is closer to: we are formally telling you what we should have told you years ago — expect more increases. That reframing matters for every decision that follows. This is the same forward-looking increase pressure we track in Genworth's 2026 rate filings, and it sits on top of the solvency backdrop covered in is Genworth in financial trouble?

Which lawsuit is yours? Match it to your policy series

The three settlements are divided by policy series — the product line your policy was sold under, which is printed on your policy schedule and your annual statements. As a general guide:

Settlement	Policy series covered	Approx. class size	Final approval
Skochin	Privileged Choice / Choice 1 era policies	~207,000	Nov 2020
Halcom	PCS I and PCS II	~144,000	Jun 2022
Haney	Choice 2, Choice 2.1, and California CADE / Reprise / Unbundled	~345,000	Feb 2023

Together those classes cover on the order of 700,000 policies — roughly 70% of Genworth's closed block of long-term care insurance, per the company's own securities filings. But treat the table as a signpost, not a verdict:

• The marketing name isn't the final word. Class membership is defined by policy form numbers and state of issue, not the brand name on the brochure. State variations of the "same" product can fall on different sides of the line.
• New York policies are frequently carved out. Policies issued by Genworth Life Insurance Company of New York (GLICNY) are often handled separately and governed by New York's own regulatory regime, so a New York policyholder may not be in the national class at all.
• Your letter is the authority. If you received a special election letter, you are being treated as a class member for that policy; the settlement administrator's site and phone line — printed on the letter — are the definitive source for your specific options and deadline.

One more practical note: the final approval dates above are not the dates letters go out. Genworth mails on a staggered schedule tied to policy anniversaries and state implementation, so two neighbors with similar policies can receive their letters months apart.

The option menu — and what each one costs you

The exact choices vary by settlement, by whether you're already on claim, and by state. (The original Skochin agreement offered five special election options; later settlements structured the menu differently.) Stripped to their economics, though, the options fall into a few families:

1. Keep your policy unchanged

You take no reduction. You keep your full daily benefit, your benefit pool, and any inflation rider — and you remain fully exposed to every future DOI-approved increase the letter just disclosed. Doing nothing is a valid, common choice; the settlement does not force you off your policy. What you "get" is the enhanced disclosure itself, plus, in some settlements, a small credit (the Skochin settlement, for instance, included a modest $100 credit).

2. Reduce benefits for a lower premium

You trade some coverage — a lower daily benefit, a shorter benefit period, or a reduced inflation rider — for a smaller premium. For a policyholder on a fixed income staring down a cumulative increase that one firm has documented running as high as ~78% over five years in certain states, this can be the mathematically right move. Trimming an overly rich inflation rider is often far better than lapsing a policy outright. The point is not "never reduce" — it's "reduce on purpose, knowing exactly what the smaller pool is worth." Our inflation-rider reduction analysis and nonforfeiture options comparison walk through that math.

3. Reduced paid-up / stop paying premiums

You stop paying, and the policy converts to a smaller "paid-up" benefit you keep for life. This is the settlement's version of a contingent nonforfeiture benefit. It can be a lifeline if the premium has become genuinely unaffordable — but it permanently shrinks your benefit pool, and once elected it generally cannot be reversed.

4. Cash damages

Some options attach a cash payment. Read the fine print here most carefully of all: substantial cash awards are generally bundled with a benefit reduction or a paid-up election — the cash is funded by the coverage you're giving up. An option that hands you a large check and leaves your coverage fully intact would be at odds with how these settlements are structured, so be skeptical of that reading of your letter and confirm it with the administrator.

The Partnership trap — and the cash-payment trap

Two consequences of "reduce" and "cash" options are easy to miss and hard to undo.

If yours is a Partnership policy, cutting benefits can shrink your Medicaid asset shield. Under a Deficit Reduction Act (DRA) Partnership policy, you earn a Medicaid asset disregard equal to the benefits the policy pays out on your behalf — protect a dollar of care, protect a dollar of assets from Medicaid's spend-down and estate recovery. Here's the subtlety: the disregard accrues on benefits paid, up to the size of your pool. So reducing the pool doesn't claw back protection you've already used — but it lowers the maximum shield you could ever earn. If your $300,000 pool is part of what makes the policy worth keeping, a settlement option that cuts it to $180,000 has quietly capped your future asset protection at $180,000. (The four original Partnership states predate the DRA; New York and Indiana in particular use total-asset protection models for certain policies rather than dollar-for-dollar, so the mechanics differ there.) We cover this in depth in how a Partnership policy protects your assets.

A cash payment can itself affect Medicaid. A lump-sum damages payment may be counted as income in the month you receive it and as a countable asset thereafter. For someone at or near Medicaid eligibility, an ill-timed settlement check can jeopardize eligibility or interact with the five-year look-back. This doesn't make the cash a bad deal — it makes timing and coordination matter.

How to think it through

There is no single right answer, and anyone who gives you one without seeing your policy and your finances is guessing. But you can structure the decision around four questions:

• Can you afford the premium through the increases the letter just disclosed? If yes, keeping the policy intact preserves every dollar of coverage. If no, a reduction or paid-up option may beat riding it to a lapse — which is the one outcome that forfeits the most. Our guide to the five options on any rate-hike letter maps this out.
• Is it a Partnership policy? If so, weigh any benefit reduction against the asset protection you'd be capping.
• Would you have lapsed anyway? If the honest answer is that you were about to walk away, a paid-up option that salvages some lifetime benefit is strictly better than nothing.
• Have you had a second set of eyes? Your state's SHIP counselors offer free, unbiased help; an elder-law attorney can price the Medicaid consequences; and the settlement administrator on your letter can confirm exactly what each option does to your policy.

The deadline is real — many special election letters require a response within 90 days, and non-response typically defaults you to "keep the policy unchanged." That default is often fine. What isn't fine is treating a downgrade or a cash option as free money because it arrived in a settlement envelope. The lawsuit's entire premise was that Genworth once let policyholders decide without the full picture. Don't repeat that mistake with the letter that was supposed to fix it. If you're still weighing whether the policy is worth keeping at all, start with should you drop your LTC policy?

Questions policyholders ask after reading the letter

Does the settlement stop Genworth from raising my premium?

No. The settlements resolved claims about disclosure, not Genworth's right to raise rates. State insurance regulators still approve increases, and the special election letter exists precisely to disclose that more increases are planned.

Do I have to do anything when the letter arrives?

Not necessarily. In most cases, taking no action means you keep your existing policy and benefits (while remaining subject to future increases). Action is required only if you want to elect one of the reduction, paid-up, or cash options — and those usually carry a ~90-day deadline.

Will taking the cash payment affect my Medicaid eligibility?

It can. A lump-sum payment may count as income the month you receive it and as an asset afterward, which can matter if you're near Medicaid eligibility. Coordinate the timing with an elder-law attorney before you elect a cash option.

How do I confirm which settlement covers my policy?

Match your policy series (on your schedule pages) to the table above as a starting point, then confirm with the settlement administrator named on your letter. Policy form number and state of issue — not the marketing name — determine class membership, and New York (GLICNY) policies are often handled separately.