Federal Long-Term Care Insurance Program: Examining Premium Increases

PURPOSE:

• To examine premium increases for enrollees of Federal Long-Term Care Insurance Program (FLTCIP) and what steps are being taken to mitigate future increases.
• To understand the challenges the long-term care industry faces in providing quality service at affordable premium rates.

BACKGROUND:

• In 2016, the U.S. Office of Personnel Management (OPM) awarded the only bidder, John Hancock Insurance, to administer FLTCIP. Under the contract, OPM announced large premium increases starting November 1, 2016 for most of the program’s 274,000 enrollees at an average increase amount of $111, or 83 percent.
• Enrollees in FLTCIP were notified of premium increases on July 18, 2016, and were given until September 30, 2016, to make a decision regarding their long-term care package.
• According to media reports, more than 96 percent of FLTCIP enrollees who had responded as of October 19 kept some form of coverage. Less than four percent of enrollees decided to abandon the program altogether.