In the News

Representatives Donald S. Beyer Jr. and Gerald E. Connolly today sent a letter to the Office of Personnel Management demanding additional details about the sudden and significant jump in premiums under the Federal Long Term Care Insurance Program. Notices were mailed this week to the nearly 264,000 affected FLTCIP participants, including thousands of federal and postal employees who Connolly and Beyer represent in Northern Virginia.

Under a new contract for the FLTCIP, the incumbent provider John Hancock, has said premiums will need to increase based on new actuarial models. Starting November 1, the average premium increase will be 83%, with some participants seeing increases as high as 126%.

“For those on a fixed or limited income, such an increase is simply unaffordable,” Beyer and Connolly wrote in the letter.

The  Members noted that the last time the FLTCIP contract was renewed with John Hancock in 2009, premiums increased by an average of 17%, with some as high as 25%. In their letter they specifically ask OPM to explain how the new premiums were calculated and why annual benchmarks were not incorporated to avert such a spike in participant cost.

In addition, Connolly and Beyer questioned the period of time with which FLTCIP participants have to elect any changes in their coverage if they want to reduce their premiums and/or insurance coverage. They note the “September 30^th deadline is concerning given the short duration for a purchasing population whose average age is 60. Medicare, by comparison, has a three month enrollment period.”

The full text of the letter can be read below and here:

July 22, 2016

Acting Director Beth F. Cobert
U.S. Office of Personnel Management
1900 E Street, NW
Washington, DC 20415-1000
 

Dear Acting Director Cobert:

As representatives of the National Capitol Region, we represent a disproportionate share of the enrollees in the Federal Long Term Care Insurance Program (FLTCIP). We write to express our concern about the extreme increase in premiums as part of the contract renewal for the FLTCIP. The cost of the insurance is expected to increase by an average of 83%, or $111 a month, with some enrollees experiencing increases of up to 126% starting, November 1^st. This will impact over 264,000 enrollees.

For those on a fixed or limited income, such an increase is simply unaffordable. By comparison, the last time OPM awarded the seven-year contract to John Hancock Life and Health Insurance Company, premiums rose on average 17%, with some as high as 25%. It merits a reconsideration of how we structure FLTCIP so that price spikes at this extreme can be avoided. 

Moreover, the Enrollee Decision Period of July 18 through September 30^th is concerning given the short duration for a purchasing population whose average age is 60. Medicare, by comparison, has a three month enrollment period.

We respectfully request your response to the following questions:

1. What accounts for the significant increase in premiums and how is that being calculated?

2. What outreach or support is being offered to enrollees beyond mailing letters?

3. Please identify ways you are working with enrollees to make these price spikes more affordable. For example, is OPM or John Hancock considering graduated premiums without a dramatic decrease in coverage?

4. Are annual benchmarks incorporated to ensure that the actuarial projected value matches the actual value? If not, why?

We look forward to your response. It is of grave concern and urgency to our constituents to have answers before the decision period ends.

Sincerely,

Donald S. Beyer Jr.

Gerald E. Connolly