The uproar over rising premiums for the Federal Long Term Care Insurance Program shows no sign of easing, and pressure is being brought on Congress to hold hearings after Labor Day.
The National Active and Retired Federal Employees Association (NARFE) continues to hear from members who are upset and want answers. NARFE has urged its members to contact their legislators, as federal retirees express their frustration over the large increases.
“I am getting a 125 percent increase and sure can’t afford to have this amount taken out of my annuity,” wrote one former federal employee.
For others, the concern is not for themselves but for older retirees who can ill-afford the higher premiums.
Jon Titman is in this group. “My wife and I can scrape together the funds to pay for a 75% increase in premiums. However, what bothers me the most about OPM and John Hancock is the complete disregard for seniors on fixed incomes that will now be forced to have less coverage or be forced out of the program entirely. And some of these people have been paying into this insurance for a decade or more.”
Holding the hearings before the end of September is important because OPM’s Enrollee Decision Period ends on September 30, 2016. By that time, current enrollees must decide whether to keep their current coverage and pay the premium increase, decrease coverage to lower the amount of the increase, or drop coverage in the program.
Premiums are due to rise effective November 1, 2016. Any Congressional action after September 30 will be too late to affect federal enrollees’ decisions this year.
Scheduling hearings is challenging because of the Congressional calendar. The Senate reconvenes from their summer recess on September 8 and is scheduled to be in session until October 7.
The House calendar is even shorter with the House of Representatives returning from their summer recess on September 6 and recessing on September 30.
Both the Senate and House will not meet again until after the November elections.
Premium jumps for long term care insurance not confined to federal workers
Long term care insurance increases are affecting more than just federal workers. In Florida the state’s Office of Insurance Regulation held a public hearing on August 12 to consider rate hikes of 20 to 95 percent being sought by MetLife with proposed rate increases of up to 114 percent by Unum for state residents, according to a news article in the Sun-Sentinel.
The story is similar in the Northeast where the Boston Globe reports that CNA has told hundreds of Massachusetts residents to expect to see their premiums rise by 95 percent over two years.
Not all rate hikes are going unchallenged. In April, the Pennsylvania Insurance Department reduced a 50 percent rate increase requested by Metropolitan Life Insurance Company down to 20 percent. John Hancock (which also handles the federal program) asked for increases ranging from 2.5 to 88 percent and received an approved increase that was capped at 20 percent.
If Congress does hold hearings this fall, one witness may be Joseph Belth, Ph.D., professor emeritus of insurance in the Kelley School of Business at Indiana University. Dr. Belth has been a consistent critic, writing that “for 25 years I have expressed the opinion that the financing of long-term care (LTC) is a problem that cannot be solved through the mechanism of private insurance. During that period, many nails have been driven into the coffin of LTC insurance, but in recent years the number has been increasing.”
In a recent blog posting, he speculates that:
It is not clear what would happen to the FLTCIP if, in the bidding for a fourth seven-year contract in 2023, there are no bidders because Hancock has withdrawn from the LTC insurance business and there are no other major companies still engaged in the business.
In that event, I think Hancock would run off its LTC business, including the FLTCIP business, and it would no longer be possible to accept enrollment from new federal employees or old federal employees who had not enrolled previously.
Given the pervasiveness of the problem across the nation, many feel it is time for Congress to step up and hold public hearings now on the future of the long term care insurance industry before more enrollees see their policies become unaffordable and their past premiums wasted.