The U.S. Office of Personnel Management has named one company to be the sole Federal Long Term Care Insurance Program carrier, and it also is increasing rates for in-force policies.
John Hancock, Boston, a unit of Manulife Financial Corp., Toronto, has won a new, 7-year federal LTC insurance program contract.
The program, which now has 224,000 enrollees, has been getting LTC coverage from Long Term Care Partners L.L.C., Portsmouth, N.H., a joint venture formed by Hancock and a unit of MetLife Inc., New York, in 2001.
Long Term Care Partners will continue to run the federal LTC program, but Hancock now will control Long Term Care Partners, officials say.
“The renewal of the FLTCIP for a second contract period underscores the government’s continued focus on the long term care issues facing our nation,” Marianne Harrison, president of John Hancock Long Term Care Insurance, says in a statement.
MetLife spokesman Joseph Madden says his company “submitted a strong proposal to OPM that reflected our pricing and risk management philosophy, but OPM made a decision that they felt was in the best interest of the program. We wish John Hancock success with the program during the next contract period and will work closely with them to help ensure a smooth transition.”
Madden notes that MetLife continues to provide other benefits to Federal employees, including life insurance, annuities and dental plans.
OPM’s new LTC contract includes new benefit options, with increased home health care reimbursement rates, new benefit periods and higher daily benefit amounts. The contract also offers increased payment limits on informal care provided by family members, OPM says.
In related news, premium rates for current federal LTC program enrollees whose policies include automatic compound inflation protection will increase between 5% and 25% around Jan. 1, 2010, OPM officials say.
Before the premium increases take effect, enrollees can decide whether to accept higher premiums and keep their current benefits, reduce benefits to keep premiums level or buy a new LTC policy with the latest benefit options without underwriting, officials say.