U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

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Federal Long Term Care Insurance Program

Frank Titus
U.S. Office of Personnel Management

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The Federal Long Term Care
Insurance Program

Sponsored by theU.S. Office of Personnel Management

The Federal Long Term Care Insurance Program is administered by Long Term Care Partners, LLC, and offered by:
John Hancock Life Insurance Company, Bosto, MA 02117
Metropolitan Life Insurance Company, New York, NY 10010

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A New Partnership

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What is Long Term Care?

• The type of care needed if you can no longer perform normal activities of daily living, like bathing, eating or dressing or if you need supervision by another person because of a cognitive impairment, such as Alzheimer’s disease

• It is provided in many different settings, such as:
• Assisted living facilities
• Nursing homes

• BUT, most often:
• AT HOME

Nursing Home Care: 20%
At-Home Care: 80%

Source: Mebane, F., "Want to Understand How Americans Viewed Long-Term Care in 1998? Start with Media Coverage", The Gerontologist, Vol.. 41, No. 1, February, 2001

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Anyone Can Need Long Term Care

The fact is, anyone can need long term care services at any time.

• 6 out of 10 people who reach age 65 will need long term care at some point in their lives¹

• 40% of the people who need long term care today are working age adults (ages 18-64)²

1.Conning & Company, Long-Term Care Insurance, Baby Boom or Bust?, 1999, p. 13
2. Ibid

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Long Term Care is Not Routinely Covered by Medical Insurance or Medicare

• Group Health Plans
  • Including FEHB, TRICARE, and TRICARE For Life
• Individual Medical Plans
• HMOs (Regular or Medicare)
• Medicare
• Medicare Supplement
• Disability Income Insurance
  
  

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Six Decisions

1. Comprehensive or Facilities-Only
2. Daily benefit amount
3. Daily or weekly reimbursement
4. Benefit period
5. Waiting period
6. Inflation protection
   
   

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Decision #1
Comprehensive or Facilities-Only

Choice of Comprehensive or Facilities-Only

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Covered Services of the Comprehensive Plan

• Nursing Home
• Assisted Living Facility
• Hospice Care in a facility
• Respite Services in a facility
• Plus
• Home Care (formal and informal)
• Adult Day Care
• Hospice Care at home
• Respite Services at home
  
  

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The Home Care Benefit

• Formal Caregivers such as:
  • Nurses
  • Home Health Aides
  • Therapists
• Informal Caregivers such as:
  • Friends and Neighbors
  • Members of your family, covered up to 365 days
  • Others

Informal care can be provided by anyone who did not normally live in your home at the time you became eligible for benefits.

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Covered Services of the Facilities-Only Plan

• Nursing Home
• Assisted Living Facility
• Hospice Facility
• Respite Services in a facility

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Decision #2
Daily Benefit Amount (DBA)

• $50 - $300 per day in $25 increments
• The Program covers the cost of your care:
  • Up to 100% of the DBA for care received in a nursing home, assisted living facility and for hospice care or respite services*
  • Comprehensive plans only - up to 75% of the DBA for home care (formal and informal) and adult day care.

*respite services are limited to 30 days per calendar year

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Decision #3
Daily or Weekly Reimbursement

• Weekly reimbursement (7 times your DBA) for greater home care flexibility

  Assumptions:

• $75 daily home care benefit
• $525 weekly home care benefit (= 7 x $75)

Day	Cost of Home Care	Daily Reimbursement	Weekly Reimbursement
Monday	$75	$75	N/A
Wednesday	$125	$75	N/A
Friday	$100	$75	N/A
Total	$300	$225	$300

 

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Decision #4
Benefit Period

• 3 Years
• 5 Years
• Unlimited
  
  

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Calculating Your Maximum Lifetime Benefit

• DBA x Benefit Period (in days) = Maximum Lifetime Benefit

Example:

$100 DBA x 1,095 days (3 years x 365 days) = $109,500

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Decision #5
Waiting Period

The number of days you must be eligible for benefits and receiving covered services before benefits are payable under this Program

-90 days
or
-30 days

Need to meet only once in your lifetime

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Decision #6
Inflation Protection Options

• Automatic Compound Inflation Option (ACI)

or

• Future Purchase Option (FPO)
  
  

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Automatic Compount Inflation Option (ACI)

• Benefits will automatically increase by 5% compounded annually for the life of the coverage
• Premiums do not increase even though your benefits do
  
  

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Future Purchase Option (FPO)

• You receive an increase in coverage every two years
• Based on Consumer Price Index for Medical Care
• Additional premium for increased coverage
• You may decline the increase
• If you decline three increases, you don’t get any more offers
• With each offer, you can switch to Automatic Compound Inflation
  
  

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The Difference in the Options

Automatic Compound Inflation Option

vs.

Future Purchase Option (Assumes all benefit increases accepted)

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The Choice Is Yours

Pre-Packaged Plans:

• Facilities 100 (3 years)
• Comprehensive 100 (3 years)
• Comprehensive 150 (5 years)
• Comprehensive 150+ (Unlimited)
  or
  A Customized Plan
  
  

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Customize a Plan

Make these six decisions:

• Comprehensive Plan or Facilities-Only
• DBA: From $50 - $300 in $25 increments
• Reimbursement: Daily or Weekly (applicable onlyto the Comprehensive Plan)
• Waiting Period: 30 days or 90 days
• Benefit Period: 3 years, 5 years, or unlimited
• Inflation Protection: ACI or FPO
  
  

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Additional Features

• Alternate plan of care
• Bed reservations
• International coverage
• Benefits for mental/nervous disorders
• Caregiver training
  
  

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Care Coordinators Help You Every Step of the Way

• Answering your questions
• Helping you qualify for benefits
• Locating providers and accessing discounts
• Monitoring your care
• Also available to qualified relatives if
  you’re enrolled even if they are not

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How to Qualify for Benefits

• You must need help to perform at least 2activities of daily living for an expected period of at least 90 days
  • Bathing
  • Dressing
  • Transferring (yourself from bed to chair)
  • Toileting
  • Eating
  • Continence

    OR

• You must have a Severe Cognitive Impairment

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What You Need to Know About Premiums

• 100% enrollee paid - no Government contribution
• Premiums are based on your age when you buy-for Open Season it is your age on July 1, 2002
• Premiums do not increase simply because you get older
• Rates are per person - there are no spouse discounts

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Sample Biweekly Premiums for Pre-Packaged Plans

Age	Fac 100	Comp 100	Comp 150	Comp 150+
45 ACI	$16.24	$24.00	$43.75	$60.36
45 FPO	$5.07	$7.56	$13.15	$17.16
55 ACI	$24.18	$35.07	$64.38	$87.92
55 FPO	$9.13	$13.66	$23.95	$31.43
65ACI	$38.76	$54.64	$99.83	$134.86
65 FPO	$19.29	$27.13	$48.32	$62.44

 

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Guaranteed Renewable/Portable

• Coverage can’t be cancelled aslong as you pay your premiums
• Coverage is portable
  
  

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Who is Eligible to Apply?

• Employees
  • Federal and U. S. Postal Service employees
  • Members of the uniformed services
• Annuitants
  • Federal and U. S. Postal Service annuitants
  • Retired members of the uniformed services
• Current spouses and adult children (age 18 and over, including adopted and stepchildren) of living employees and annuitants
• Parents, parents-in-law, and stepparents ofliving employees
  
  

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What Else Do You Need To Know?

• Qualified relatives can apply even if the employee, member of the uniformed services or annuitant/retiree they’re related to does not
• Minimum age: 18 years
• Maximum age: None
• Each person applies individually

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Underwriting Requirements For Open Season

• Underwriting is the process of reviewingyour health status to determine whether you qualify for coverage
• Employees and their spouses have abbreviated underwriting
• All other applicants have full underwriting

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What if I Don't Pass Underwriting?

Two Options:

• The Service Package
  • All applicants who are declined
• The Alternative Insurance Plan
  • Some employees and spouses
    
    

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Coverage Effective Date

• Later of October 1, 2002, or first ofmonth following approval of your application
• Actively at work requirement for employees

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Billing Options

• Payroll/annuity/pension deduction
• Automatic bank withdrawal
• Direct bill

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Why the Federal Program?

• Abbreviated underwriting for Federal employees and their spouses
• Expansive Informal Care Benefit
• Expansive International Coverage
• Innovative Inflation Options
• Care Coordination for non-insured qualified relatives of enrollees
  
  

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Why the Federal Program?

• NO exclusion from benefits for mental or nervous disorders
• NO war exclusion
• The right to an independent third-party review of disputed claims
• Save with group rates
• Premium stability with premiums designed to be constant for life
• Financial strength and industry leadership of John Hancock and MetLife
• OPM oversight