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U.S. Raise Long-Term Care Insurance Rates for Government Workers

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Federal employees who want to purchase long-term care insurance through the federal program will be paying more for their premiums, the Washington Post reported on Wednesday. As of Aug. 1, new enrollees will pay higher rates than current enrollees in the Federal Long-Term Care Insurance Program.

Government Executive, a business publication serving high-level civilian and military officials, reported that notices sent to agency benefit officers by the Office of Personnel Management, which sponsors the program, did not specify an average rate increase, but said the increases apply to all plan options for new enrollees.

A comparison of the plans shows that in FLTCIP 1.0, daily benefit amounts were paid in increments of $25 between $50 and $300 a day. FLTCIP 2.0 uses $50 increments between $100 and $450. The old plan provided weekly benefit amounts equal to seven times the daily benefit; that option is no longer available to 2.0 enrollees.

Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI), said the federal program is the largest long-term care insurance program in the United States, and expressed surprise at the increase.

“This frankly was a surprise because the program is up to be rebid shortly when one assumes rates will go up,” he said in a statement.  “The last premium increase took place back in 2009, which made this policy less expensive than many policies available to individuals.  That may seem good, but it also means a rate increase for policyholders or a change in policy benefits could be likely.”

The new plan eliminated a 30-day waiting period option. New enrollees must be eligible for the program for 90 days before they can receive benefits, but they are no longer required to incur expenses in that period. Both FLTCIP 1.0 and 2.0 require that the waiting period only be met once in the participant’s lifetime.

Both plans cover nursing home and assisted living facility care up to 100% of the daily benefit amount. Where the grandfathered plan covers home care and adult day care up to 75% of the DBA, new enrollees’ plan will cover up to 100%.

Coverage increased for informal care provided by family members, too, from 75% to 100% of the DBA, and the maximum lifetime benefit was extended from 365 days to 500 days.

Current enrollees have access to a facilities-only plan that covered 100% of the daily benefit amount at a nursing home, assisted living facility or hospice provider. That plan has been eliminated for new enrollees.

Changes were made to the programs stay-at-home benefit, too. Under FLTCIP 1.0, caregiver training is paid up to seven times the DBA, and other benefits are covered under an “alternate plan of care” mutually agreed upon by the care coordinator and the participant. FLTCIP 2.0 outlines specific stay-at-home benefits that will be covered: caregiver training, still payable up to seven times the DBA; care planning visits; emergency medical response systems; durable medical equipment; and home safety checks.

The stay-at-home benefit under FLTCIP 2.0 is payable up to 30 times the DBA and can be used during the waiting period as long as the participant meets the benefit eligibility. Benefits paid don’t reduce the maximum lifetime benefit. Another significant change is to the inflation protection options offered, particularly in the future purchase option. Enrollees in FLTCIP 1.0 can choose an automatic compound inflation option (ACIO) at 4% or 5% that increases annually their daily or weekly benefit amount and the remaining maximum lifetime benefit. Enrollees in FLTCIP 2.0 may also choose the ACIO, but weekly benefits are not available.

Alternatively, current enrollees could choose a future purchase option (FPO) that would increase the DBA or WBA and remaining maximum lifetime benefit every two years, unless the enrollee declined in writing. That increase is based on the Department of Labor’s Consumer Price Index for Medical Care. New enrollees can still choose the FPO (but without weekly benefits), but increases will be based on the Department of Labor’s Consumer Price Index for All Urban Consumers.

Furthermore, enrollees in FLTCIP 1.0 could switch to the ACIO option without underwriting, but those in the new plan will have to show insurability before they can switch. The old plan would stop sending offers to increase benefit amounts after three declines, but enrollees in the new plan can decline the offer an as many times as they want.

Slome said that the federal plan isn’t necessarily the best option for those who are eligible. “It could very well be, especially if you are a single woman or have some existing health conditions, but if you are in good health or qualify for a discount insurers’ offer to couples or partners when one or both apply, it really pays to compare.”


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