Open enrollment for the Federal Long Term Care Insurance Program, the largest group long-term care insurance plan in the United States, begins April 4 and continues until June 24 (2011).
This is the first abbreviated underwriting opportunity for non-enrolled applicants since 2002. The Federal program currently has over 200,000 participants and is available to millions of Federal employees, postal workers, active military as well as spouses and, for the first time, many same-sex partners. During the open enrollment period applicants will answer fewer health questions in order to be eligible for the program.
Initially, two insurers (John Hancock and MetLife) offered the insurance protection establishing Long Term Care Partners, LLC, a new company dedicated to administering the FLTCIP. In May 2009, the Office of Personnel management (OPM) selected John Hancock as the sole insurer for the FLTCIP’s second seven-year contract term.
It is important for consumers who are eligible for the program to understand that this is a “group” plan utilizing nine simplified health underwriting questions. Knowledgeable financial experts explain that this is a significant opportunity for those who already have some health issues and who may not health qualify for private LTC insurance.
However, financial planners explain that the federal program does not offer good-health discounted rates. These generally reduce what one pays for coverage and are locked-in. Simply stated, they are not lost when the policyholder’s health changes in future years. The federal plan also does not offer spousal or partner discounts that can amount to as much as 40 percent in annual savings for each person.
As a result, couples who are in good health can generally obtain significantly more coverage for less money and should compare the federal program with private long-term care insurance plans available from leading insurance companies including John Hancock, Genworth, Prudential, Mutual of Omaha, LifeSecure and MedAmerica.
The following chart compares costs for the Federal Plan compared to the 2011 LTC Insurance Price Index compiled by the American Association for Long-Term Care Insurance. The industry trade organization gathers rates from leading, top-rated insurers.
Single Person (age 55): $ 1,398.12 per-year
Husband / Wife (both age 55) $ 2,796.24 per-year
Costs for $150-per-day benefit, 3-year Benefit Period, 4% compound inflation.
LTC Insurance Company A:
Single Person (age 55): $ 1,325.00 per-year
Husband / Wife (both age 55) $ 2,084.00 per-year
Costs for $150-per-day benefit, 3-year Benefit Period, 3% compound inflation, includes Preferred Health discount.
For Couple: Includes Shared Care Benefit Rider + Spousal Discount for Couple
LTC Insurance Company B:
Single Person (age 55): $ 1,435.00 per-year
Husband / Wife (both age 55) $ 2,162.00 per-year
Costs for $150-per-day benefit, 3-year Benefit Period, 3% compound inflation includes Preferred Health discount.
For Couple: Includes Shared Care Benefit Rider + Spousal Discount for Couple.