NARFE Calls for Hearings on Long Term Care Premium Increases

The National Active and Retired Federal Employees Association (NARFE) to various Congressional committees requesting hearings to examine the dramatic increases federal employees in the Federal Long Term Care Insurance Program are facing.

The National Active and Retired Federal Employees Association (NARFE) has sent letters to the House Committee on Oversight and Government Reform, the Senate Committee on Homeland Security and Governmental Affairs, and the Senate Special Committee on Aging requesting hearings on proposed dramatic increases in premiums for the Federal Long Term Care Insurance Program (FLTCIP).

“Nearly 264,000 federal employees will face an average 83 percent premium increase, an estimated $111 per month,” NARFE National President Richard Thissen noted in the letters. “This situation has many NARFE members stunned and outraged.”

Premium increases have been 83 percent, on average, and could be as high as 126 percent.

“Enrollees 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,” Thissen explained.

“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,” he continued. “This situation should not have occurred and signals the need for change in the structure of FLTCIP to prevent federal employees and retirees from ever facing such huge, unexpected increases again.”

NARFE’s latest action is much stronger than their original response to the higher rates and may reflect feedback from its own members and other federal retirees who are questioning how John Hancock arrived at the new premium rates.

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.

July 18 marked the start of the enrollee decision period. 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.