NARFE Stunned, Angered by Increases Announced in Federal Long Term Care Premiums

FOR IMMEDIATE RELEASE Contact: Jessica Klement
July 18, 2016 703-838-7760
  jklement@narfe.org

Alexandria, VA –Richard G. Thissen, National President of the National Active and Retired Federal Employees Association (NARFE), said today he is stunned and angered by the size of the average increase in federal long-term care insurance premiums announced by the Office of Personnel Management.

“This massive, 83 percent premium increase will come as a shock to the more than 274,000 federal employees and annuitants and their spouses enrolled in the Federal Long Term Care Insurance Program (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. I am stunned at the extent of the increase and angry that this type of financial pressure is being placed on federal employees and retirees. This situation should not have occurred and 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.”

“This is not what NARFE envisioned for the program 16 years ago when the Long-Term Care Security Act was signed into law by President Bill Clinton. NARFE took pride in the fact that it played the leading role in ensuring that millions of families in the federal and military communities would have access to long-term care benefits without being sent to the poorhouse. Today, however, the poorhouse is back in the picture, as enrollees face an average increase of $111 per month in long-term care premium costs.

“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.

“When FLTCIP was launched in 2002, eligible individuals were assured that the program would have ‘premium stability.’ The likelihood of a rate hike was downplayed in promotional materials. 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. When the first rate hike of 25 percent was announced in 2009, NARFE was concerned that early warning signs within the industry had not been heeded. As a result, opportunities to mitigate that premium increase were either disregarded or missed. It is infuriating to find ourselves saying the same thing seven years later.

“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.”

Today marks the beginning of the 2016 FLTCIP enrollee decision period. Enrollees impacted by the premium increases will be sent an offer package with personalized plan change options that allow them to keep their current coverage with increased premiums; keep current premiums but reduce coverage; or split the difference by reducing coverage and increasing premiums, but by less for each.

New premiums will take effect November 1, 2016. For those paying premiums from their annuities, the first increased premium payment will be reflected in the December 1 annuity payment.

About 10,000 of the 274,000 enrollees in FLTCIP will not be affected by the premium increase at this time. Those enrollees are: (i) those who applied for coverage on or after new application rates were raised on August 1, 2015; (ii) those whose age at purchase was 80 years or older; (iii) those currently enrolled in the FLTCIP’s Alternative Insurance Program; and (iv) those currently eligible for benefits or awaiting a decision pending a claim.
                                                                               # # #

The National Active and Retired Federal Employees Association (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 five million current and future federal annuitants, spouses and survivors.

National Active and Retired

FEDERAL EMPLOYEES Association

NARFE (National Active and Retired Federal Employees Association) 606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

 

This is the only website that reflects the official opinions and positions of the National Active and Retired Federal Employees Association (NARFE). Opinions and/or positions that appear on any other site bearing NARFE's name or seal are not necessarily those of NARFE. Click here for Privacy Statement.   NARFE has been certified by Dun & Bradstreet.

NARFE Stunned, Angered by Increases Announced in Federal Long Term Care Premiums

FOR IMMEDIATE RELEASE Contact: Jessica Klement
July 18, 2016 703-838-7760
  jklement@narfe.org

Alexandria, VA –Richard G. Thissen, National President of the National Active and Retired Federal Employees Association (NARFE), said today he is stunned and angered by the size of the average increase in federal long-term care insurance premiums announced by the Office of Personnel Management.

“This massive, 83 percent premium increase will come as a shock to the more than 274,000 federal employees and annuitants and their spouses enrolled in the Federal Long Term Care Insurance Program (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. I am stunned at the extent of the increase and angry that this type of financial pressure is being placed on federal employees and retirees. This situation should not have occurred and 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.”

“This is not what NARFE envisioned for the program 16 years ago when the Long-Term Care Security Act was signed into law by President Bill Clinton. NARFE took pride in the fact that it played the leading role in ensuring that millions of families in the federal and military communities would have access to long-term care benefits without being sent to the poorhouse. Today, however, the poorhouse is back in the picture, as enrollees face an average increase of $111 per month in long-term care premium costs.

“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.

“When FLTCIP was launched in 2002, eligible individuals were assured that the program would have ‘premium stability.’ The likelihood of a rate hike was downplayed in promotional materials. 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. When the first rate hike of 25 percent was announced in 2009, NARFE was concerned that early warning signs within the industry had not been heeded. As a result, opportunities to mitigate that premium increase were either disregarded or missed. It is infuriating to find ourselves saying the same thing seven years later.

“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.”

Today marks the beginning of the 2016 FLTCIP enrollee decision period. Enrollees impacted by the premium increases will be sent an offer package with personalized plan change options that allow them to keep their current coverage with increased premiums; keep current premiums but reduce coverage; or split the difference by reducing coverage and increasing premiums, but by less for each.

New premiums will take effect November 1, 2016. For those paying premiums from their annuities, the first increased premium payment will be reflected in the December 1 annuity payment.

About 10,000 of the 274,000 enrollees in FLTCIP will not be affected by the premium increase at this time. Those enrollees are: (i) those who applied for coverage on or after new application rates were raised on August 1, 2015; (ii) those whose age at purchase was 80 years or older; (iii) those currently enrolled in the FLTCIP’s Alternative Insurance Program; and (iv) those currently eligible for benefits or awaiting a decision pending a claim.
                                                                               # # #

The National Active and Retired Federal Employees Association (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 five million current and future federal annuitants, spouses and survivors.

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FEDERAL EMPLOYEES
Association



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NARFE (National Active and Retired Federal Employees Association) 606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

 

This is the only website that reflects the official opinions and positions of the National Active and Retired Federal Employees Association (NARFE). Opinions and/or positions that appear on any other site bearing NARFE's name or seal are not necessarily those of NARFE. Click here for Privacy Statement.   NARFE has been certified by Dun & Bradstreet.