LTC Premium Hike to Get Attention

One employment-related issue almost certain to will get early attention in Congress is the pending increase in FLTCIP premiums effective November 1 for all but a few percent of current enrollees (the main exception being those who enrolled in August 2015 and later). The announcement of those increases occurred just after Congress left on its recess. In the time since numerous members of Congress have called for hearings. Of particular concern is why premiums are increasing by so much—by 83 percent on average and up to 126 percent—and how OPM and the carrier, the John Hancock insurance company, could have been so far off in their prior assumptions about the program’s income and outgo. The increases are being blamed primarily on a combination of demographic trends and low yields on investments of the plan’s financial reserves, which critics have said should have been foreseeable. The bipartisan leaders of the House Oversight and Government Reform Committee have asked the company for details and several senators sent a similar query to OPM, also suggesting that the September 30 deadline for affected enrollees to decide whether to keep or restructure their coverage be extended by at least two months. Also likely to arise at any hearings is the view by many enrollees that they joined the program on the promise that their premiums would be fixed for life; OPM and the carrier say the only promise was that there would be no increase due to an individual’s situation, such as declining health.