Senator rips federal long-term care insurance program for 'unacceptable' premium hikes
A federal long-term care insurance program that was supposed to usher in a new era of acceptance by a skeptical public was criticized Wednesday at a Senate hearing. The gathering was called after more than half of those enrolled in the federal long-term care insurance (FLTCI) program found they were facing a significant—and unexpected—rate increase.
The Office of Personnel Management, which handles the FLTCI program, said recently that enrollees who chose the automatic compound inflation option would see a premium increase of roughly 25%, despite early assurances that rates would never increase under that option. According to testimony from OPM, policy holders' only options are to pay the increased rate for their policies, receive less coverage and pay the same amount, or cancel their policies altogether, forfeiting all past payments to the program.
“In these difficult economic times, this unexpected increase is unacceptable,” said Sen. Daniel Akaka (D-HI), who co-chaired the hearing with Sen. Herb Kohl (D-WI).
An early, aggressive marketing push by OPM misled consumers into thinking their premiums would not rise if they purchased these particular plans, claimed Margaret Baptiste, president of the National Association of Retired Federal Employees (NARFE), and Colleen Kelley, president of the National Treasury Employees Union (NTEU). About 5% of federal employees and retirees participate in the FLTCI program.
Due to its relatively recent arrival in the marketplace, long-term care insurance has been very difficult to appropriately regulate, testified Mary Beth Senkewicz, Deputy Insurance Commissioner, Life & Health, Florida Office of Insurance Regulation. FLTCI coverage is provided by LTC Partners, LLC, a partnership of the John Hancock and Metropolitan Life insurance companies under contract with the Office of Personnel Management.