September 23, 2011

Federal LTC Enrollment Soars

Open season saw first offering of benefits to same-sex domestic partners

The Federal Long-Term Care Insurance Program, in its first major open season for enrollment since its inception, saw an increase of 20% in enrollment, with more than 45,000 now covered by the largest employer-sponsored plan in the U.S.

The Office of Personnel Management released figures Thursday indicating that, despite premium increases for most members, more than 98% chose to keep existing coverage in force. Also, more than 300 applications were received during the open season from same-sex domestic partners of federal employees, who were allowed to apply for the program with the same abbreviated underwriting granted to spouses.

OPM added that it and Long Term Care Partners, which administers the program, had developed a new and enhanced set of benefits, called FLTCIP 2.0; this provides additional services, such as greater home health care coverage, often looked for by enrollees.

An August study by the Government Accountability Office showed that, in 2009, premium increases of up to 25% were largely due to costs associated with a 5% automatic compound inflation option. Despite the increase, 46% chose to keep their coverage unchanged. An equal percentage opted instead to reduce coverage to 4%, either by keeping the original plan (20%) or by opting for FLTCIP 2.0 (26%); the latter offers enhanced coverage that includes 100% coverage of the cost of home care and adult day care. The previous plan had covered 75% of these.

Jesse Slome, executive director of the American Association for Long-Term Care Insurance, said of the numbers, "In addition to those enrolling in the plan, we estimate some 10,000 or more eligible individuals purchased private coverage directly as a result of all the promotion."

Regarding the GAO study, Slome had said earlier, "Instead of hyperbole, we now have facts to prove that the majority of consumers understand the value of their long-term care insurance protection and do not drop or reduce their coverage even when faced with a rate increase ... "People understand the risk they face when they purchase long-term care insurance and the protection becomes even more valuable as they age themselves."

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