Two Congressmen are asking the Office of Personnel Management for answers about why the premiums paid by federal employees in the Federal Long Term Care Insurance Program (FLTCIP) will be going up an average of 83% this fall.
“We write to express our concern about the extreme increase in premiums as part of the contract renewal for the FLTCIP,” wrote Congressmen Gerry Connolly (D-VA) and Don Beyer (D-VA).
They added, “The cost of the insurance is expected to increase by an average of 83%, or $111 a month, with some enrollees experiencing increases of up to 126% starting November 1st. For those on a fixed or limited income, such an increase is simply unaffordable.”
The lawmakers went on to ask OPM some questions as to why the premiums are jumping so much, namely for an explanation for the rate increase and how it’s calculated as well as what support is being offered for FLTCIP enrollees beyond just sending them letters.
The National Active and Retired Federal Employees Association (NARFE) was also upset over the news of the premium increases. National president Richard G. Thissen said in a statement, “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.”
According to OPM, John Hancock, the carrier for FLTCIP, proposed significantly higher premiums because a recent analysis of the program indicated that the current FLTCIP premiums would not be sufficient to meet the future, projected costs of the benefits.
Federal employees who may be impacted by the premium increases can learn more about their current options with information being provided by OPM in this post: OPM Reminds FLTCIP Participants About Upcoming Rate Increase.
A copy of the Congressmen’s letter is included below.
July 22, 2016
Acting Director Beth F. Cobert
U.S. Office of Personnel Management
1900 E Street, NW
Washington, DC 20415-1000
Dear Acting Director Cobert:
As representatives of the National Capitol Region, we represent a disproportionate share of the enrollees in the Federal Long Term Care Insurance Program (FLTCIP). We write to express our concern about the extreme increase in premiums as part of the contract renewal for the FLTCIP. The cost of the insurance is expected to increase by an average of 83%, or $111 a month, with some enrollees experiencing increases of up to 126% starting, November 1st. This will impact over 264,000 enrollees.
For those on a fixed or limited income, such an increase is simply unaffordable. By comparison, the last time OPM awarded the seven-year contract to John Hancock Life and Health Insurance Company, premiums rose on average 17%, with some as high as 25%. It merits a reconsideration of how we structure FLTCIP so that price spikes at this extreme can be avoided.
Moreover, the Enrollee Decision Period of July 18 through September 30th is concerning given the short duration for a purchasing population whose average age is 60. Medicare, by comparison, has a three month enrollment period.
We respectfully request your response to the following questions:
- What accounts for the significant increase in premiums and how is that being calculated?
- What outreach or support is being offered to enrollees beyond mailing letters?
- Please identify ways you are working with enrollees to make these price spikes more affordable. For example, is OPM or John Hancock considering graduated premiums without a dramatic decrease in coverage?
- Are annual benchmarks incorporated to ensure that the actuarial projected value matches the actual value? If not, why?
We look forward to your response. It is of grave concern and urgency to our constituents to have answers before the decision period ends.
Donald S. Beyer Jr.
Gerald E. Connolly