There seems to be widespread concern—and more than a little resentment–in the federal workforce regarding the premium increases set to hit the FLTCIP program in November, which will average 83 percent and affect all but a few percent of enrollees (mainly, those who have enrolled since premiums rose by a lesser amount last August; they will continue to pay at their current rates, as will future new enrollees).
Each time there has been a premium increase—there was one for certain categories of enrollees in 2010 after expiration of the previous contract, plus the one last year for new enrollees—many have argued that they were promised that their premiums never would increase once they enrolled. OPM blames the increases on claims patterns whose result is that projected income from the prior rates would be insufficient to cover the projected payout in the program.
Regarding promises of stability in rates, the program booklet says this: “Premiums are not guaranteed. Your premium will not change because you get older or your health changes or for any other reason related solely to you. However, your premiums may increase if you are among a group of enrollees whose premium is determined to be inadequate. While the group policy is in effect, OPM must approve the change”—which it now has done three times in seven years, blaming longer life expectancies, higher costs of care, and low rates of return in the program’s financial reserves, primarily.
Employee organizations argue that both OPM and the carrier should have done a better job of setting premiums in the first place and that the large hike leaves enrollees, many of them in or near retirement, with the difficult decision of dropping or reducing coverage–after having paid for it for many years in many cases—just before they most likely might need it, or continuing coverage at the higher rate on an income that is fixed or soon will be.
Through September, affected enrollees can choose to: keep their benefits the same, subject to the higher premiums; reduce their benefits to keep premiums about the same; mix of a lesser reduction in benefits and a lesser increase in premiums; or, for those eligible, invoking a “paid-up” provision in which they can stop paying premiums but remain eligible for a lesser maximum lifetime benefit of the larger of up to the total premiums paid to date or 30 times the daily benefit amount in the policy. For those who make no election, the default will be to keep benefits the same subject to the higher premiums.