Mike Causey

Long Term Care Insurance: The Clock’s Ticking!

There are two kinds of insurance most people need but hope their premium dollars will be wasted. They are fire insurance and long term care insurance. Senior Co...

Federal News Network Staff

July 16, 2008 4:00 am

3 min read

Long Term Care insurance is like fire-insurance. You hope have it but you hope you never collect. The best thing that can happen is that all your premiums are “wasted,” that you never have a devastating fire or wind up unable to feed, bathe or dress yourself.

Many people consider LTC insurance as a way to take care of themselves with dignity and preserve their assets. Nursing homes and assisted living centers aren’t cheap. And most services covered by LTC are not covered by regular health insurance or Medicare.

So…

This is a good time to think about Long Term Care insurance?

If so, two things:

Good for you. LTC covers things no other benefit plan (like Medicare or your FEHBP) will pay for. Regardless of your age, you might need LTC coverage tomorrow, due to an accident or stroke, or some other unforeseen event.
Think fast. Time may be running out for you to get relatively low-cost coverage through Uncle Sam or, in some cases, even lower cost via some private health firm.

Here’s how Bethesda-based financial planner Arthur Stein explains it:

Any member of the Federal family thinking of purchasing long-term care insurance should read the notice from the Federal LTC Insurance Program (FLTCIP) website (www.ltcfeds.com).

According to the notice, the current contract between OPM and the two insurance companies who provide the coverage expires April 30, 2009 and will then be replaced. When the new contract starts on May 1, 2009, existing policyholders may find that:

Their benefits and/or premiums have changed.
A different insurance company or companies is providing their insurance.

In my opinion, premiums are much more likely to increase than stay the same or decrease. So, if premiums change for existing FLTCIP policy holders, that means an increase in premiums or decrease in benefits.

Now is a better time than ever to compare the federal policy to individual policies that can be purchased privately. Compared to FLTCIP, two advantages of individual policies are that benefits can never be reduced by the insurance company and that premiums can only be increased with the permission of the state insurance commissioner.

Stein’s e-mail is: astein@finsvcs.com

Currently the LTC program is underwritten by long-time insurance giants John Hancock and MetLife. By law the contract must be rebid before it terminates. A number of companies are expected to go after the business. There is no guarantee that premiums will be increased (or decreased) or that benefits will be reduced or enhanced.

But this is a good wake-up call for people who want the protection. People who don’t need it include self-insured multi-millionaires, individuals who know they will never get sick or never have an accident. Otherwise you ought to consider it.

Moving On

OPM Director Linda M. Springer has told top staffers that she will be leaving government in mid-August for a job in the private sector.

She’s only the 8th person to hold the premier OPM job.

Springer came to OPM from the Office of Management and Budget where she was the Controller.

Before joining Uncle Sam, Springer spent more than two decades in the private sector where she hgained experience in insurance programs.

This helped her manage the huge federal employee health benefits operation which covers nearly 9 million current and former feds, their current and former spouses and more than a million retired feds, from accountants and CIA operatives to ex-presidents.

During her three years at OPM Springer launched a number high-tech changes in major federal personnel programs. She managed to avoid many of the pitfalls (not the least what to do during snow emergencies) that tripped up a number of former OPM directors.

Nearly Useless Factoid

The final nine players have been determined for this year’s final table of the World Series of Poker main event. Among them is not President Warren Harding. He’s dead, but that’s not why he won’t be there. It’s because even when he was alive, he wasn’t a very good poker player. In fact, he once lost the White House China, yes, the entire set, in a poker game.

To reach me: mcausey@federalnewsradio.com