Fedweek

OPM plans to stop allowing newly hired employees and their spouses to apply within 60 days using only abbreviated underwriting, which has fewer health-related questions. Image: Wollertz/Shutterstock.com

OPM’s notice that it expects to “revise” premium rates in the Federal Long-Term Care Insurance Program represents the latest in a series of benefit reductions and premium increases over the program’s 20 years of existence.

FLTCIP premiums are based on age when the person buys the coverage and on choices including the daily benefit amount, the maximum length of the benefit period and inflation protection. Premiums may increase during the course of a contract due to enrollment and claims patterns, however.

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That happened effective in March 2010 for enrollees who were under age 70 when they purchased automatic inflation coverage. Also, rates were increased for all enrollments after July 31, 2015 for the same reason; that did not affect those already enrolled at the time. Further, rates increased in November 2016—again for the same reason—for almost all of those who had enrolled before August 1, 2015.

The November 2016 increase was so steep that for some enrollees it triggered a provision that applies if a person’s premium increases by a certain percentage over the cost at enrollment. In that case an enrollee can stop paying premiums and remain eligible for a much-reduced benefit.

Also, different premium rates apply to those enrolling after October 20, 2019 due to changes in the program that resulted in a benefits package labeled FLTCIP 3.0, including creation of a “premium stabilization” feature. (That is a credit, paid as part of the premium, that builds up over time and is payable as a lump-sum payment on death, or as a reduction in premiums on reaching age 85 if certain conditions are met.) Because of that change premium rates cannot be directly compared with prior rates.

The original FLTCIP design, which ran from 2002-2009, is called FLTCIP 1.0; the second, which ran from 2010-October 21, 2019, is called FLTCIP 2.0; the design for elections since then is called FLTCIP 3.0. While those already enrolled at the time of those changes could keep the coverage they elected so long as they continued paying the premiums, the progression from one version of the program to the next was one of restricting benefits.

For example, a prior option for a lifetime benefit period is no longer available, and benefit amounts for all those purchasing inflation protection increase by 3 percent a year where formerly options for 4 or 5 percent increases were available.

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