Big Cost Bump Ahead for Federal Long-Term Care Enrollees

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By Louis C. LaBrecque

July 18 — Enrollees in the optional Federal Long Term Care Insurance Program will face an 83 percent average increase in their premiums under a new contract between the Office of Personnel Management and John Hancock Life and Health Insurance Co., according to a group that represents federal employees and retirees.

Richard G. Thissen, president of the National Active and Retired Federal Employees Association, said in a July 18 statement the increase “will come as a shock to the more than 274,000 federal employees and annuitants and their spouses” enrolled in the FLTCIP.

“They are now faced with difficult choices—pay substantially higher premiums; reduce coverage substantially; or, in the worst case scenario, drop the coverage some have paid into for more than 14 years,” he said.

Enrollees in the program face an average increase of $111 per month in long-term care premium costs, assuming they stay in the same plan, Thissen said.

The situation “signals the need for change in the structure of the FLTCIP to prevent federal employees and retirees from ever facing such huge, unexpected increases again,” he said.

About 10,000 of the 274,000 enrollees in FLTCIP won't face a premium increase, NARFE said. These enrollees are those:

  •  who applied for coverage on or after new application rates were raised on Aug. 1, 2015;
  •  whose age at purchase was 80 years or older;
  •  currently enrolled in the FLTCIP’s Alternative Insurance Program; and
  •  currently eligible for benefits or awaiting a decision pending a claim.

John Hatton, NARFE's deputy legislative director, told Bloomberg BNA July 18 the group's figures regarding the average premium increases in the FLTCIP came from the OPM, which provided them to stakeholders.

The current average premium is $134 per month, Hatton said.

Increases From Zero to 126 Percent

FLTCIP enrollees under the new contract will face increases ranging from zero to 126 percent, depending on the enrollee's age at time of enrollment, the design of the plan they selected and whether the enrollee makes changes to their current policy to offset the increase, the OPM said in a statement provided to Bloomberg BNA July 18.

The increases will take effect Nov. 1, but enrollees will be able to make changes to their plans from now until Sept. 30, the OPM added.

The OPM in its statement said the FLTCIP offers coverage “to help pay for costs of care when enrollees need help with everyday activities, such as bathing or eating, or if they have a severe cognitive impairment, such as Alzheimer's disease.”

“As mandated by Federal law, OPM must issue a new contract term every seven years for this benefit. After nearly a year of seeking proposals, OPM received one bid, and subsequently awarded a new, seven-year contract” to John Hancock, which will continue to administer the program through its Long Term Care Partners subsidiary, the OPM said.

The OPM in a July 18 benefits administration letter said FLTCIP enrollees that don't choose a new plan by the Sept. 30 deadline for making changes will maintain their current coverage with an increased premium.

Enrollees on Hook for Actuaries' Calculations

According to NARFE, this isn't what the group expected 16 years ago when the Long-Term Care Security Act was signed into law by President Bill Clinton.

“The explanation will be that the actuaries got it wrong, and long-term care costs are rising faster than expected. That may be the case, but enrollees should not bear the financial responsibility for the mistakes of insurance actuaries,” Thissen said.

When the FLTCIP was launched in 2002, he added, eligible individuals were assured that the program would have “premium stability.”

“The likelihood of a rate hike was downplayed in promotional materials,” he said. “Indeed, FLTCIP applicants would have had to wade through 20 pages of the 38-page benefit booklet to find an explanation about the possibility of rate hikes.”

In 2009, Thissen added, FLTCIP enrollees faced a 25 percent average rate hike.

“NARFE once again is put in the position of wanting to encourage its members to plan for the future, while having great difficulty recommending a product whose premiums are not predictable or affordable,” he said in the group's statement.

To contact the reporter on this story: Louis C. LaBrecque in Washington at

To contact the editor responsible for this story: Tony Harris at

For More Information

Text of the OPM benefits administration letter is available at

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