Lawmakers press OPM to extend LTC open season to no avail

Three lawmakers are encouraging the Office of Personnel Management to extend the deadline for federal employees and retirees to sign up for long-term health care insurance beyond Sept. 30.

Reps. Chris Van Hollen (D-Md.), Gerry Connolly (D-Va.) and Don Beyer (D-Va.) wrote to OPM acting Director Beth Cobert asking for more time for federal employees to understand why the rates for long-term health care insurance are increasing on average by 83 percent and to make a decision.

“Since this announcement was first made in July, we have not received acceptable answers for why changes in actuarial projections occurred so suddenly as to justify this dramatic premium hike, why OPM failed to provide advance notice of the impact of these projections to enrollees, and how OPM plans to improve oversight of the program to prevent sudden hikes in the future,” the three members wrote. “As the enrollment deadline rapidly approaches, we have heard from many of our constituents who are angry, worried, and struggling to identify the best of several difficult options that are available to them.”

OPM spokesman Sam Schumach said the agency does not plan to extend open season for long-term care insurance.

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“OPM shares the concerns expressed by the members of Congress and the federal employees enrolled in the Federal Long Term Care Insurance Program (FLTCIP) regarding the premium rate increases. The new pricing adjusts for changing trends in morbidity and mortality rates as well as expected return on investments and these increases are necessary to be sure that OPM is meeting its statutory requirement for FLTCIP premiums to reasonably and equitably reflect the costs of the benefits provided,” Schumach said in an email. “Similar trends have caused long term care insurance rates to increase across the industry. Any additional delay of the increase would result in enrollees ultimately paying a greater premium rate, since the increase would need to take into account and correct for any additional period of time with inadequate premiums.”

Schumach added OPM continues to brief lawmakers, federal employees and retirees.

“Over the course of the 75 day enrollment period, the insurer, John Hancock, has actively been reaching out to enrollees to present a variety of personalized options to reduce the impact of the rate increase, including at least one option that allows current premiums to be maintained by reducing benefits,” he said. “As of this week, over 136,000 enrollees have made an election and we expect that figure to increase, as is normally the case, prior to the Sept. 30 deadline. All enrollees, regardless of whether they make an election prior to the deadline, will have an additional 30 days after receiving their new schedule of benefits to select any of the personalized options that were originally provided for them in their offer package.”

OPM expects the rate increases to impact 264,000 active and retired feds. They would pay on average $111 more per month for the same coverage they have now.

The Enrollee Decision Period started July 18 and runs through Sept. 30. Lawmakers have said the open season was short given the fact the average age of the purchasing population is 60.

Van Hollen said despite concerns that any delays increase costs, OPM should extend open season until after Congress holds a hearing on the rate hikes. He asked the House Oversight and Government Reform Committee to hold an emergency hearing earlier this summer. But the committee now is expected to hold a hearing on the rate increase in November.

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“People relied on the information OPM provided, and the information was misleading,” Van Hollen said in an interview with Federal News Radio. “The information has provided has been an inadequate explanation of how they got it so wrong. John Hancock and OPM provided different enrollees information at time they enrolled  and now changed what they said. That’s why we are asking for additional time.”

Van Hollen said in 2002 OPM did a presentation that said long-term health care insurance premiums would remain constant for the life of the policy unless the enrollee increases their benefits, or only by OPM approval on a group basis, but not an individual basis.

“This situation merits a thorough Congressional review of the structure of FLTCIP and OPM’s oversight of the program,” Van Hollen, Connolly and Beyer wrote. “In the meantime, we expect that you will work closely with enrollees to minimize the burden of this unexpected and significant rate hike and give them time to make the best decision for themselves and their families.”

Connolly and Beyer asked for more details on why the rates increased by so much back in July.

Additionally, Sens. Ben Cardin (D-Md.) and Barbara Mikulski (D-Md.) have added their voices to the mix as well, sending a letter to OPM on Aug. 19, followed by Rep. Jason Chaffetz (R-Utah), chairman of the Oversight and Government Reform Committee, and three others on Aug. 23 who wrote to John Hancock Financial Services.