FOR IMMEDIATE RELEASE
Dan Adcock 703-838-7760

National Active and Retired Federal Employees Association (NARFE) President Margaret L. Baptiste was encouraged today by the Office of Personnel Management’s (OPM’s) announcement that it would extend the deadline for Federal Long Term Care Insurance Program (FLTCIP) enrollees to make changes in their coverage to avoid or mitigate a 25-percent premium increase.   Most enrollees who added the automatic compound inflation (ACI) option to their FLTCIP plan are subject to the rate hike.  OPM has moved the deadline from December 14, 2009, to February 15, 2010.

Among several NARFE recommendations, Baptiste told the Senate Aging Committee and the Senate Subcommittee on the Federal Workforce during her testimony on October 14 that the “special decision period” was not long enough.  She also expressed her concerns about the quality of outreach and education OPM and Long Term Care Partners – the third party administrator of the program – were providing to federal workers and annuitants about their benefit options.

“We are pleased that federal employees, retirees and survivors will have more time to carefully weigh what long-term care insurance coverage they will have in light of the 25-percent premium increase,” Baptiste said.  “However, the decisions FLTCIP enrollees will be compelled to make continue to go from bad to worse because they’ll have to give up coverage to steer clear of the rate hike.”

She said that so-called “landing spots” developed by OPM and Long Term Care Partners to help enrollees avoid paying the premium increase should allow the insured to trade the ACI option for an increased benefit amount.   “Indeed, when coverage was first offered, some financial planners suggested to certain clients that they buy a benefit amount in excess of current costs as an alternative to the compound inflation protection’s hedge against inflation.  In fact, those who took this advice are not facing a rate hike,” she said.

Baptiste praised Chairmen Herb Kohl, D-WI, and Daniel Akaka, D-HI, for holding the October 14 hearing, but commented that further review is necessary to determine the point at which OPM and Long Term Care Partners responded to the program’s shortfall and decided when to increase premiums. 

In addition, the NARFE president said that Congress must take steps to restore confidence in the program.  “The downturn in the long-term care insurance industry and further consolidation could make matters worse in 2016 when the contract is re-bid.”  She said, “Consolidation means there is less competitive pressure on carriers to offer the best possible product.  For that reason, now may be the time for Congress to consider whether the FLTCIP should self-insure.”

* * *

NARFE, one of America’s oldest and largest associations, was founded in 1921 with the mission of protecting the earned rights and benefits of America’s active and retired federal workers. The largest federal employee/ retiree organization, NARFE represents the retirement interests of nearly 5 million current and future federal annuitants, spouses, and survivors.