10/14/09: Many federal employees and retirees enrolled in the government’s long-term care insurance program were stunned to learn of substantial increases in premiums scheduled in January, NTEU National President Colleen Kelley today told congressional members, particularly since many enrollees believed they had purchased plans which guaranteed no premium increases.

"Those who purchased policies," President Kelley said, “made smart decisions to plan ahead for their long-term care needs. Those who paid more for policies with the Automatic Compound Inflation (ACI) protection option were told their premiums would not increase.” President Kelley testified before the Senate Homeland Security and Governmental Affairs Subcommittee on the Federal Workforce and the Senate Aging Committee at a joint hearing titled: “Sticker Shock: What’s the True Cost of Federal Long-Term Care Insurance?”

Despite the promises made in marketing materials at the beginning of the long-term care program seven years ago, enrollees in the ACI option are now facing premium increases as high as 25 percent. 

The Office of Personnel Management (OPM), which announced the increases, told NTEU and others it blames the increases on faulty actuarial predictions and the complexities of calculating premiums to cover benefits tied to the increasing costs associated with medical and long-term care. 

Using ACI promotional materials sent to her by NTEU members, Kelley pointed out to the lawmakers various statements saying directly there would be no premium increases. “It should come as no surprise that many NTEU members feel misled and mistreated by their government,” President Kelley said. She called for an extension of the current period enrollees have to make changes to their policies or decide to accept the increases. That period is scheduled to run through Dec. 14.  

By the end of this month, the 225,000 enrollees in the federal long-term care insurance program will begin receiving personalized mailings detailing their options, which likely will include retaining their current policies, with the appropriate premium increase based on their age at the time of their purchase; changing benefits; or taking a percentage less in inflation protection to retain the same premium.

President Kelley urged Congress to find a solution for those affected and repeated NTEU’s support for S. 1177, the Confidence in Long-Term Care Insurance Act of 2009, introduced by Sen. Herbert Kohl (D-Wisc.), chairman of the Senate Aging Committee. That legislation would help provide consumers in the future obtain a better understanding of the coverage and cost of their plans. Sen. Daniel Akaka (D-Hawaii) is chairman of the Homeland Security Federal Workforce Subcommittee. 

“Finally,” President Kelley said, “if I leave the committees with one message today, it is this:  OPM can never let this happen again.  The federal long term care insurance program needs to remain viable and it should become a model in this new field of long term care, as it was originally envisioned.  The government’s long-term care insurance program has experienced a rocky beginning.  Hundreds of thousands of federal families deserve better treatment from their government.  OPM and its partner John Hancock must get it right this time –and never let a premium fiasco like this occur again.”