New LTC premiums: Your personal Mount Vesuvius moment

What do folks in Ashburn, Bethesda and Glover Park have in common with residents of ancient Pompeii? Senior Correspondent Mike Causey says they all got a nasty ...

In August, 79 A.D., Mount Vesuvius erupted, burying the town of Pompeii (near Naples) in volcanic ash. Tens of thousands were killed. It is likely that shortly after the horrific surprise, a committee of the Roman Senate (maybe dedicated to government reform and oversight) demanded to know why the volcano exploded, why weren’t people warned in advance, and who was responsible for the whole thing.

In August, 2016 A.D., the government announced that premiums in its in-house, long-term-care insurance program would be going up an AVERAGE of 83 percent, with some rising as much as 126 percent, in November. While no fatalities have been reported, lots of people got a big jolt.

Shortly after the most recent news, members of the House and Senate did what they are awfully good at. They expressed shock and outrage. They wanted to know why premiums are going up so much, why people weren’t warned in advance and who is responsible for it. Many of the protests came from out of town because Congress is on a five-week break. Given the fact that there is a national election the first Tuesday in November, and Congress has much to do in the few remaining in-town and at-work days, premiums are going up regardless of how angry feds and retirees are and how much Congress protests after-the-fact.

Over the weekend, one member of the House demanded to know why only one firm  — John Hancock — bid on the federal contract this year. It sounded like an accusation that the “fix” was in and other carriers (who might have settled for a smaller premium hike) were excluded from the bidding. But people who know the insurance business say that the reason only one firm bid on the contract was that only one firm applied. Others who also underwrite LTC programs stayed away because of the costs associated with the program.

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An expert in the various federal insurance programs —life (FEGLI), health (FEHBP) and long-term care — said everybody failed to take into account that people are living longer, they are arriving at long-term and memory facilities in very bad shape and they are in care for longer than anyone anticipated. The number of insurance companies that even offer LTC coverage has dropped dramatically in the last decade.

Whatever the reasons that premiums are going up, the fact is they are, and feds and retirees are seeing red. For example:

“I am one of the thousands of retired federal employees to open the LTC letter informing me of the incredible rate increases. I have purchased this insurance since 2003 and can vividly remember the John Hancock presenter stating the that the rates would never go up! Never say never. I had a long telephone conversation with the LTC representative who really tried to explain my three options. I still cannot really understand the interest rate increases, so I turned to Federal News Radio and specifically to your column, where I read two of your stories. Do you plan to run an article that clearly explains what the different options mean for coverage? “ Caryl Kazen

Nearly Useless Factoid

By Michael O’Connell

Much of what we know about the eruption of Mount Vesuvius comes from letters written by Pliny the Younger, a Roman administrator and poet. Pliny observed the eruption from afar and interviewed survivors. His letters were discovered in the 16th century.


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