Many feds face horrible choices in November

For the politically-minded, is there anything worse than being an establishment Republican following the GOP convention in Cleveland? Or a non-establishment Democrat who hoped against hope that  somehow Bernie Sanders would be making the acceptance speech today in Philadelphia?

Short answer is yes, there is at least one thing worse.  Which is: You could be an anti-Clinton, anybody-but-Trump registered voter.   Now that is double-trouble.

Say you are a fed with the Commerce Department. Or maybe  Park Ranger in Wyoming. Or an IRS employee in Austin, Ogden or Detroit. Maybe with the NIH in Maryland.  Or a postal clerk or letter carrier in Sitka, Alaska, or Brooklyn.  Maybe you’ve retired from the federal government and you—or at least your political party—picked the wrong candidate.  Wrong being the one ou didn’t support. Maybe can’t support in November. For many people the what-to-do question is out there.

But if you are a member of the federal family, active, retired or survivor, and you have long term care insurance you face a gut-punching decision in November.  LTC health care premiums are going UP an AVERAGE of 83 percent.  That’s $111 per month.  And it  means some people will pay less, some considerably more.

Between now and November they must decide whether to continue the insurance coverage and pay the higher premiums, or downsize their policy reducing their coverage (the daily amount paid for care, the length of the policy or its inflation-benefit option) to reduce their premium hike.  Or drop the insurance altogather which, if you need it down the line, could be a tragic mistake.

Most feds are probably aware of the pending premium hike.  Or soon will be.  Virtually everybody is asking the same question:  Why the huge increase.  That will be hashed out in the weeks ahead, but there is little chance the premium hike will  be overturned. The law tht setup the federal program requires that it be totally self funding.  Congress doesn’t support it with appropriations.  It must generate enough revenue (through premiums and investments) to pay the LTC bills of people who use the insurance.  LTC has proven to be much more costly  than the experts predicted when it started  This year only one company (John Hancock Life) even bid on the new 7-year federal contract.

So how bad are things in the LTC business?  People are living longer than the actuaries predicted back in the day. And more are going into long term care older, and sicker, than predicted.  In the year 2000 there were 102 insurance companies offering long term care.  Today there are only 12 to 12 companies and 10 of them write 93 percent of the LTC insurance business.   Many companies that provide LTC (like mine) got out of the business.  They grandfathered in members of the group (like me) but aren’t taking new customers.

Earlier this month on our Your Turn radio show we talked with representatives of Long Term Care Partners  which runs the federal program for John Hancock, under the supervision of the Office of Personnel Management.  They answered lots of questions about LTC in general, and the upcoming premium hike in particular. There will be other shows in August and September where you can write or call in questions or comments.  Meantime to listen to last week’s show, click here.

Nearly Useless Factoid

By Jory Heckman

Ping pong originated in England during the 1880s, where it was played among the upper-class as an after-dinner parlour game. It has been suggested that the game was first developed by British military officers in India or South Africa who brought it back with them.

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