FLTCIP Enrollees Facing an Average 83% Rate Hike for Long Term Care Insurance

Enrollees in the Federal Long Term Care Insurance Program are going to be facing a steep premium increase later this fall. OPM is providing those affected with information about their choices to deal with the cost increase.

Richard G. Thissen, National President of the National Active and Retired Federal Employees Association (NARFE), didn’t hold back after hearing that rates for Federal long-term care insurance will be increasing by an average of 83 percent.

“I am stunned at the extent of the increase and angry that this type of financial pressure is being placed on federal employees and retirees. This situation should not have occurred and signals the need for change in the structure of the FLTCIP to prevent federal employees and retirees from ever facing such huge, unexpected increases again. This is not what NARFE envisioned for the program 16 years ago when the Long-Term Care Security Act was signed into law by President Bill Clinton.”

“This massive, 83 percent premium increase will come as a shock to the more than 274,000 federal employees and annuitants and their spouses enrolled in the Federal Long Term Care Insurance Program (FLTCIP). They are now faced with difficult choices – pay substantially higher premiums; reduce coverage substantially; or, in the worst case scenario, drop the coverage some have paid into for more than 14 years,” said Thissen.

In a fact sheet published by the Office of Personnel Management, OPM defended the increase insisting that the new, seven-year contract was awarded to John Hancock Life & Health Insurance Company “after a full and open competitive bidding process” and “the new premium rates are those established as a result of this competitive process.”

John Hancock was the prior carrier and the only bidder to provide insurance coverage for the Federal Long Term Care Insurance Program (FLTCIP). Long Term Care Partners, LLC, will continue to administer the FLTCIP.

According to OPM, John Hancock proposed significantly higher premiums because recent analysis of the program, using updated assumptions based on identified trends and actual claims experience, indicated that the current FLTCIP premiums would not be sufficient to meet the future, projected costs of the benefits.

Current FLTCIP enrollees impacted by the premium increase, which is set to take effect November 1, will receive a 2016 Enrollee Decision Period offer package from Long Term Care Partners, LLC, and John Hancock Life & Health Insurance Company.

Enrollees wanting to keep their current coverage and pay the premium increase need take no action. If an enrollee chooses to keep their current coverage and pay the premium increase, their coverage will remain the same and the premium will increase, effective November 1, 2016. OPM is suggesting that enrollees consider personalized options to help reduce the impact of the premium increase and suggests that one option is to reduce coverage to offset the rate increase. Decreasing coverage does not require any additional underwriting. To increase coverage, an enrollee must go through the underwriting process.

The FLTCIP Customer Service Center is available to answer questions Monday through Friday, from 8 a.m. to 8 p.m. (ET), at 1-800-LTC-FEDS (1-800-582-3337) TTY 1-800-843-3557. Enrollees may also go online to make changes.

The deadline to submit a personalized option selection is September 30, 2016.

About the Author

Michael Wald is a public affairs consultant and writer based in the Atlanta area. He specializes in topics related to government and labor issues. Prior to his retirement from the U.S. Department of Labor, he served as the agency’s Southeast Regional Director of Public Affairs and Southeast Regional Economist.