Upcoming Suspension of Federal Long Term Care Insurance Applications?

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tallguy3891
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Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by tallguy3891 »

Someone might have already mentioned this, but if I read it correctly, the OPM site shows the FLTCIP is suspending new applications effective the end of 12/18/22 for a period of 2 years (unless they announce otherwise) to update the program. Apparently will not accept any new applications during that time.

Good info to know if anyone is interested in the program.
OpenMinded1
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by OpenMinded1 »

Good to pass along.

My wife and I already have it. Have been notified that there will be a premium increase in 2023, but don't know how much yet.
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tallguy3891
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by tallguy3891 »

Apparently the suspension also applies to requests to increase coverage on an existing policy. See OPM site for full details.
realcsc
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Federal Long Term Care - suspending enrollments

Post by realcsc »

Apparently a two year suspension on enrollments in the Federal Long Term Care Insurance plan is going in to effect soon. Here is my source:

https://www.forbes.com/sites/howardglec ... 8fd4f8279a

This does not give me a lot of confidence in the viability of this program. Received our 2023 premium notice in mail today, which interestingly does not include any thing about the enrollment suspension. This follows the doubling of premiums back in 2016. We have had policies for over ten years, but I think it may be time to end this and just move on.
Would love to get other opinions on if it is time to throw in the towel?
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by Kendall »


Realcsc’s post has been merged into the ongoing discussion.

Welcome to Bogleheads, realcsc!
1grl1by
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Re: Federal Long Term Care - suspending enrollments

Post by 1grl1by »

realcsc wrote: Tue Nov 22, 2022 3:21 pm Apparently a two year suspension on enrollments in the Federal Long Term Care Insurance plan is going in to effect soon. Here is my source:

https://www.forbes.com/sites/howardglec ... 8fd4f8279a

This does not give me a lot of confidence in the viability of this program. Received our 2023 premium notice in mail today, which interestingly does not include any thing about the enrollment suspension. This follows the doubling of premiums back in 2016. We have had policies for over ten years, but I think it may be time to end this and just move on.
Would love to get other opinions on if it is time to throw in the towel?
I haven't gotten my 2023 premium notice yet. Unfortunately, I have some chronic health conditions that would make it difficult for me to go elsewhere at this point. I've had my Federal policy since they were first introduced way back when. My husband has a Mutual of Omaha policy that we bought in 2019 that is fairly similar to my Federal plan, and the premium is just a few dollars more than my Federal plan.
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slowandsteadywins
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by slowandsteadywins »

I'm 30 years old, and eligible for FLTCI. The Automatic Compound Inflation Option (ACIO) option for 3% annual inflation increases state that the premiums would not change. Doesn't this mean that the premiums should not change at all? I am not clear on how to decide on this, but I wanted to get a policy before they closed it for two years. Who would be a good person or method to determine if this is necessary or a good investment for me? They quoted me the following:

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"Nothing in this world can take the place of persistence; Persistence and determination alone are omnipotent." | -Calvin Coolidge
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nps
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by nps »

slowandsteadywins wrote: Tue Nov 22, 2022 10:59 pm I'm 30 years old, and eligible for FLTCI. The Automatic Compound Inflation Option (ACIO) option for 3% annual inflation increases state that the premiums would not change. Doesn't this mean that the premiums should not change at all? I am not clear on how to decide on this, but I wanted to get a policy before they closed it for two years. Who would be a good person or method to determine if this is necessary or a good investment for me?
Check out this article by Allan Roth to help determine if it's worth it to you.

https://www.advisorperspectives.com/art ... -insurance
OpenMinded1
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by OpenMinded1 »

slowandsteadywins wrote: Tue Nov 22, 2022 10:59 pm The Automatic Compound Inflation Option (ACIO) option for 3% annual inflation increases state that the premiums would not change. Doesn't this mean that the premiums should not change at all?
Double check this, but I think this just means that your premium won't increase each time the coverage is increased 3% to help compensate for inflation. It doesn't mean that your premium will never increase.
Last edited by OpenMinded1 on Wed Nov 23, 2022 1:21 pm, edited 1 time in total.
OpenMinded1
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Re: Federal Long Term Care - suspending enrollments

Post by OpenMinded1 »

realcsc wrote: Tue Nov 22, 2022 3:21 pm Received our 2023 premium notice in mail today, which interestingly does not include any thing about the enrollment suspension.
This follows the doubling of premiums back in 2016. We have had policies for over ten years, but I think it may be time to end this and just move on.
Would love to get other opinions on if it is time to throw in the towel?
Do you know what your 2023 premiums will be? If yes, will there be an increase for you in 2023? If yes, what percentage increase? We got something a couple months ago saying there would be an increase, but it didn't say how much.

We have had one increase since getting it in 2014. Our increase was fairly small. It certainly didn't come anywhere close to doubling our premiums. I would remember that.
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AnnetteLouisan
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by AnnetteLouisan »

I was told by the insurance broker for fltcip that getting the higher daily amount but no inflation protection is the best way to keep premiums relatively consistent. He told me the inflation protection is what makes premiums jump and that by getting the highest daily amount, that is in effect your inflation protection, plus with the future purchase option you can increase coverage every two years. However he said that when inflation was very low. I pay $55/month for coverage of 3 years at “up to” $350 a day and my premium went up to $63 in 12 years (I always declined the future purchase option). I haven’t bought supplemental. I hear they all majorly jack up rates in your 70s and 80s but that it can be very useful (I know people whose parents used it for dementia care). I also know people who dropped the coverage in old age when rates increased. Lapse rates in this area are probably high as they are in many areas of insurance most likely.
OpenMinded1
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by OpenMinded1 »

slowandsteadywins wrote: Tue Nov 22, 2022 10:59 pm I'm 30 years old, and eligible for FLTCI. The Automatic Compound Inflation Option (ACIO) option for 3% annual inflation increases state that the premiums would not change. Doesn't this mean that the premiums should not change at all? I am not clear on how to decide on this, but I wanted to get a policy before they closed it for two years. Who would be a good person or method to determine if this is necessary or a good investment for me? They quoted me the following:
It might make sense for you to get LTCI at age 30 depending on your health or family health history. However, 30 would be too young for most people considering the total paid in premiums before they are likely to need LTC. Signing up between age 55 and 65 seems to be the "sweet spot" for most people. Premiums are higher than at age 30, but you probably wouldn't pay them for nearly as long before needing LTC. For most people waiting until older than 55 to 65 dramatically increases the likelihood of being disqualified.
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AnnetteLouisan
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by AnnetteLouisan »

OpenMinded1 wrote: Wed Nov 23, 2022 8:05 am
slowandsteadywins wrote: Tue Nov 22, 2022 10:59 pm I'm 30 years old, and eligible for FLTCI. The Automatic Compound Inflation Option (ACIO) option for 3% annual inflation increases state that the premiums would not change. Doesn't this mean that the premiums should not change at all? I am not clear on how to decide on this, but I wanted to get a policy before they closed it for two years. Who would be a good person or method to determine if this is necessary or a good investment for me? They quoted me the following:
It might make sense for you to get LTCI at age 30 depending on your health or family health history. However, 30 would be too young for most people considering the total paid in premiums before they are likely to need LTC. Signing up between age 55 and 65 seems to be the "sweet spot" for most people. Premiums are higher than at age 30, but you probably wouldn't pay them for nearly as long before needing LTC. For most people waiting until older than 55 to 65 dramatically increases the likelihood of being disqualified.
The principal benefit of starting young is that, at least in the federal program, if you buy it in your first 6 months of federal employment, there is no underwriting process and rates are very low when you are young. Also since future enrollees face less lucrative programs, it may make sense to start early. The issue is whether you think you will be able to afford the lifetime premiums. If not, or if you can self fund, it’s likely a waste (at least that is what the disclosures say).
stan1
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by stan1 »

I would not recommend a healthy 30 year old buy this coverage. The chances of it being around in its current form in 60 years when needed are pretty slim. In fact, the chances of it being around in its current form in two years might not be good.

Why is there a two year suspension in enrollments? That is a serious development. The only reason I can think of is that FedPoint (formerly LTC Partners), the fully owned subsidiary of John Hancock, the insurer behind the program, wants very different terms and has threatened to non-bid if OPM puts out a solicitation for a new contract leaving no likely bidders. Facing a lapse in the contract OPM has no choice but to pause and restructure, likely working with FedPoint as a sole source contractor, to see what they can negotiate. Two years is a long time. Maybe OPM and FedPoint are hoping for more favorable economic conditions or OPM needs Congressional action. Rates could be significantly restructured for all current enrollees, or they could decide to terminate the program entirely paying back premiums to enrollees or transferring them into a retail program without OPM sponsorship.
I think the chance of OPM coming back in two years time with "everything's fine, good to go, no major changes" is very, very low. Of course this is speculation but I don't see how suspending enrollments is anything other than a very major decision indicating the health and viability of the program is in question and that coverage will go down or rates will go up significantly.

From the Federal Register posting:
OPM is suspending applications for coverage in FLTCIP to allow OPM and the FLTCIP Carrier to assess the benefit offerings and establish sustainable premium rates that reasonably and equitably reflect the cost of the benefits provided, as required under 5 U.S.C. 9003(b)(2).
delamer
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Re: Federal Long Term Care - suspending enrollments

Post by delamer »

realcsc wrote: Tue Nov 22, 2022 3:21 pm Apparently a two year suspension on enrollments in the Federal Long Term Care Insurance plan is going in to effect soon. Here is my source:

https://www.forbes.com/sites/howardglec ... 8fd4f8279a

This does not give me a lot of confidence in the viability of this program. Received our 2023 premium notice in mail today, which interestingly does not include any thing about the enrollment suspension. This follows the doubling of premiums back in 2016. We have had policies for over ten years, but I think it may be time to end this and just move on.
Would love to get other opinions on if it is time to throw in the towel?
We’ve had our policies for about 12 years; we got them during an open enrollment period.

I’m surprised that your premiums have doubled. We opted to decrease our inflation protection the last time there was an increase in premiums to limit the hit.

I go back-and-forth somewhat on keeping the coverage. But our joint premiums are a very small percent of our income, so we’ve held on. And leaving a legacy for our kids is important to us, so the policies really are insurance. We could afford to self-insure except in the most extreme case (both of us needing 10+ years of care).
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
delamer
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by delamer »

stan1 wrote: Wed Nov 23, 2022 10:35 am I would not recommend a healthy 30 year old buy this coverage. The chances of it being around in its current form in 60 years when needed are pretty slim. In fact, the chances of it being around in its current form in two years might not be good.

Why is there a two year suspension in enrollments? That is a serious development. The only reason I can think of is that FedPoint (formerly LTC Partners), the fully owned subsidiary of John Hancock, the insurer behind the program, wants very different terms and has threatened to non-bid if OPM puts out a solicitation for a new contract leaving no likely bidders. Facing a lapse in the contract OPM has no choice but to pause and restructure, likely working with FedPoint as a sole source contractor, to see what they can negotiate. Two years is a long time. Maybe OPM and FedPoint are hoping for more favorable economic conditions or OPM needs Congressional action. Rates could be significantly restructured for all current enrollees, or they could decide to terminate the program entirely paying back premiums to enrollees or transferring them into a retail program without OPM sponsorship.
I think the chance of OPM coming back in two years time with "everything's fine, good to go, no major changes" is very, very low. Of course this is speculation but I don't see how suspending enrollments is anything other than a very major decision indicating the health and viability of the program is in question and that coverage will go down or rates will go up significantly.

From the Federal Register posting:
OPM is suspending applications for coverage in FLTCIP to allow OPM and the FLTCIP Carrier to assess the benefit offerings and establish sustainable premium rates that reasonably and equitably reflect the cost of the benefits provided, as required under 5 U.S.C. 9003(b)(2).
I tend to agree with your analysis, especially the unlikelihood of “everything’s fine.”

A two-year suspension seems excessive, but better to overestimate the time needed than underestimate it.

I doubt that the program will be discontinued. Time will tell.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
tj
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by tj »

It makes me wonder if I should even keep my policy in force.

I opened mine in 2019 when I started with the federal government at age 34.

I originally opened the policy for $72.16/month for up to 5 years of up to $450/day benefit with the future increase options.

Looks like I had accepted an increase option at some point the policy now says $77.19 per month for 5 years of up to $479.84/day benefit.
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by VanGar+Goyle »

tallguy3891 wrote: Mon Nov 21, 2022 3:11 pm Someone might have already mentioned this, but if I read it correctly, the OPM site shows the FLTCIP is suspending new applications effective the end of 12/18/22 for a period of 2 years (unless they announce otherwise) to update the program. Apparently will not accept any new applications during that time.

Good info to know if anyone is interested in the program.
For the non-feds out there
OPM is the U.S. Office of Personnel Management (OPM) and serves as the chief human resources agency and personnel policy manager for the Federal Government
FLTCIP is Federal Long Term Care Insurance Program (FLTCIP)
OpenMinded1
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by OpenMinded1 »

OpenMinded1 wrote: Wed Nov 23, 2022 8:05 am
slowandsteadywins wrote: Tue Nov 22, 2022 10:59 pm I'm 30 years old, and eligible for FLTCI. The Automatic Compound Inflation Option (ACIO) option for 3% annual inflation increases state that the premiums would not change. Doesn't this mean that the premiums should not change at all? I am not clear on how to decide on this, but I wanted to get a policy before they closed it for two years. Who would be a good person or method to determine if this is necessary or a good investment for me? They quoted me the following:
It might make sense for you to get LTCI at age 30 depending on your health or family health history. However, 30 would be too young for most people considering the total paid in premiums before they are likely to need LTC. Signing up between age 55 and 65 seems to be the "sweet spot" for most people. Premiums are higher than at age 30, but you probably wouldn't pay them for nearly as long before needing LTC. For most people waiting until older than 55 to 65 dramatically increases the likelihood of being disqualified.
delete
Last edited by OpenMinded1 on Wed Nov 23, 2022 3:49 pm, edited 1 time in total.
BruDude
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by BruDude »

"Update the program" usually means raise the rates and reduce the benefits
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by OpenMinded1 »

AnnetteLouisan wrote: Wed Nov 23, 2022 9:07 am
OpenMinded1 wrote: Wed Nov 23, 2022 8:05 am
slowandsteadywins wrote: Tue Nov 22, 2022 10:59 pm I'm 30 years old, and eligible for FLTCI. The Automatic Compound Inflation Option (ACIO) option for 3% annual inflation increases state that the premiums would not change. Doesn't this mean that the premiums should not change at all? I am not clear on how to decide on this, but I wanted to get a policy before they closed it for two years. Who would be a good person or method to determine if this is necessary or a good investment for me? They quoted me the following:
It might make sense for you to get LTCI at age 30 depending on your health or family health history. However, 30 would be too young for most people considering the total paid in premiums before they are likely to need LTC. Signing up between age 55 and 65 seems to be the "sweet spot" for most people. Premiums are higher than at age 30, but you probably wouldn't pay them for nearly as long before needing LTC. For most people waiting until older than 55 to 65 dramatically increases the likelihood of being disqualified.
The principal benefit of starting young is that, at least in the federal program, if you buy it in your first 6 months of federal employment, there is no underwriting process and rates are very low when you are young. Also since future enrollees face less lucrative programs, it may make sense to start early. The issue is whether you think you will be able to afford the lifetime premiums. If not, or if you can self fund, it’s likely a waste (at least that is what the disclosures say).
Maybe I'm comparing apples to oranges, but I got my FLTCI at age 55 after being a fed employee for many years. Benefit period: 3 years, Benefit amount: $205/day. Max lifetime benefit: $224,793, Automatic Compound Inflation: 4%. My premium is $137/month. Looks like he would be paying more per month - $142.84 - even though he is only 30, but his coverage/benefits would be better.
OpenMinded1
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by OpenMinded1 »

tj wrote: Wed Nov 23, 2022 11:40 am It makes me wonder if I should even keep my policy in force.

I opened mine in 2019 when I started with the federal government at age 34.

I originally opened the policy for $72.16/month for up to 5 years of up to $450/day benefit with the future increase options.

Looks like I had accepted an increase option at some point the policy now says $77.19 per month for 5 years of up to $479.84/day benefit.
Are you sure that's per month, and not per pay period? Slowandsteadywins's post above shows a FLTCI quote for a 30 year old that is $142/month. That coverage provides a $250 daily benefit amount and a five year benefit period.
tj
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by tj »

OpenMinded1 wrote: Wed Nov 23, 2022 4:05 pm
tj wrote: Wed Nov 23, 2022 11:40 am It makes me wonder if I should even keep my policy in force.

I opened mine in 2019 when I started with the federal government at age 34.

I originally opened the policy for $72.16/month for up to 5 years of up to $450/day benefit with the future increase options.

Looks like I had accepted an increase option at some point the policy now says $77.19 per month for 5 years of up to $479.84/day benefit.
Are you sure that's per month, and not per pay period? Slowandsteadywins's post above shows a FLTCI quote for a 30 year old that is $142/month. That coverage provides a $250 daily benefit amount and a five year benefit period.
FLTCIP 3.0 is much more expensive than FLTCIP 2.0, which was in place when I applied, was. If i had opted for unlimited years of benefits rather than 5 years it would have been closer to the $70/pay period rather than $70/mo.
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slowandsteadywins
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Re: Upcoming Suspension of Federal Long Term Care Insurance Applications?

Post by slowandsteadywins »

nps wrote: Wed Nov 23, 2022 6:24 am
slowandsteadywins wrote: Tue Nov 22, 2022 10:59 pm I'm 30 years old, and eligible for FLTCI. The Automatic Compound Inflation Option (ACIO) option for 3% annual inflation increases state that the premiums would not change. Doesn't this mean that the premiums should not change at all? I am not clear on how to decide on this, but I wanted to get a policy before they closed it for two years. Who would be a good person or method to determine if this is necessary or a good investment for me?
Check out this article by Allan Roth to help determine if it's worth it to you.

https://www.advisorperspectives.com/art ... -insurance
Thanks, I'll give this a read!

Also appreciate everyone else's responses.
"Nothing in this world can take the place of persistence; Persistence and determination alone are omnipotent." | -Calvin Coolidge
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