The enrollees in the Federal Long Term Care Insurance Program may hate the recent round of rate increases, but most are continuing to pay their premiums.
The program has about 274,000 enrollees. Premiums for most of the enrollees increased sharply Nov. 1: The average increase originally proposed for the enrollees affected was 83 percent.
The affected enrollees were paying an average of $134 per month for coverage this summer. If all of the affected enrollees had accepted the proposed increases as is, that would have pushed the average monthly premium by $111 to $245.
About 172,000 of the affected enrollees made active decisions about their long-term care insurance benefits by the Sept. 30 decision deadline.
About 96,000, or 56 percent, chose to keep their monthly premiums the same by accepting a lower level of long-term care insurance coverage.
Another 40 percent agreed to pay higher premiums to keep their long-term care insurance coverage the same.
Just 3.3 percent chose to stop paying premiums for long-term care insurance coverage. Many of those enrollees still have some coverage from the long-term care insurance program, because they received paid-up “nonforfeiture” coverage when they decided to stop paying the premiums.
John O’Brien, a senior advisor for health policy at the U.S. Office for Personnel Management, and Michael Doughty, president of Boston-based John Hancock Insurance, gave those figures to the U.S. House Oversight and Government Reform government operations subcommittee today in written hearing testimony.
The subcommittee was starting a hearing on the Federal Long Term Care Insurance premium increases at press time.
Here’s a look at more of what O’Brien and Doughty said about the program, drawn from written versions of their testimony posted on the subcommittee website:
Biggest voluntary LTCI program
The Office of Personnel Management is the human resources office for most federal employees.
OPM started the Federal Long Term Care Insurance Program in 2001, in response to the idea that federal workers needed more help with protecting themselves against long-term care risk.
The program, which has a seven-year contract renewal cycle, is open to both federal employees and many of those dependents and relatives.
Originally, John Hancock, which is now a unit of Toronto-based Manulife Financial Corp., worked with a unit of New York-based MetLife Inc. to run the benefits fund at the heart of the program. MetLife dropped out of the program when the program went through its first contract renewal cycle.
Related: Feds: LTCI enrollment rises 20%
A John Hancock affiliate was the sole bidder for the current program contract.
Doughty, the John Hancock executive, notes in his written testimony that the program provides unusual benefits, such as the lack of a war exclusion, a generous benefit for family members and other loved ones who act as informal caregivers, international benefits, and a care coordination program run by registered nurses.