Retirement & Financial Planning Report

On average, people who buy long-term care (LTC) insurance pay more than $2,000 per year. A married couple might pay twice that amount. Some people are reluctant to pay that much, year after year. If they never need long-term care, they’ll get no benefit from spending those thousands of dollars.

One solution is to buy a Alternative Health Plans Not Skimming Off the Healthy


A recent report finds no support for the contention that alternative health insurance plan designs with “consumer-driven” or “high-deductible” features skim off relatively healthy enrollees from the general eligible population.

The report by the Employee Benefit Research Institute, involving health plans in general, underscores assessments by the Office of Personnel Management regarding the Federal Employees Health Benefits program.

When such plans were introduced into the FEHB during the Bush administration, organizations representing retirees, especially, expressed fear that those designs would be especially attractive to younger and/or relatively healthy persons who expect to use relatively little health care. Their concern was that such persons would concentrate in those plan options, leaving other FEHB enrollees with a less desirable risk pool and thus higher premiums and/or lower levels of coverage.

In the time since then, however, OPM has consistently said that there has been no such “adverse selection” effect on the FEHB. A GAO report supported that position, concluding that enrollees in such plans tend to be higher-income persons drawn to them by the tax advantages, not healthier people drawn by the potential for savings on premiums.

The EBRI report found that persons age 21-34 with the choice of such plans actually are less likely to enroll in them. In fact, it said, the highest rates of enrollments are among older persons. As with the GAO report, the study found a correlation with the desire for tax saving among those at higher earnings levels and thus higher tax rates.