These Slides vs. Your Handout*

• We added a few slides (or sentence(s) to a slide) after the handouts were made

• We put an asterisk (*) after the title on new slides and after the sentence on new sentences

What is Long Term Care?

• LTC is care for people who need help taking care of themselves

• It is different from health care coverage

Who Uses Long Term Care?

• Not just the aged!

• 57% are age 65 and older

• 40% are 18 - 64

Source: The Urban Institute, May 5, 2000

What Types of Care Do They Use?

• 82% is home care, adult day care, assisted living, etc.

• Only 18% is nursing home care

• Most long term care is NOT skilled care

Source: Agency for Health Care Research and Quality, September 2000

Why Are We Offering This?

• Not covered by existing programs

• Long Term Care Security Act (P.L. 106-265)

• OPM contracting role similar to FEHB and FEGLI

Type of Policy

• Comprehensive insurance

• Coverage for nursing home care, assisted living facility care, formal and informal care, hospice care, respite care, bed reservations, etc

Groups Eligible to Apply for Coverage

In the law:

• All Federal employees and members of the Uniformed Services (including USPS and TVA, not DC Govt)

Groups Eligible to Apply for Coverage

In the law:

• Federal retirees (immediate annuity), Uniformed Services retirees, and reservists (when eligible for annuity)

• includes survivor annuitants (immediate annuity) and compensationers

Groups Eligible to Apply for Coverage

In the law:

• All employees and retirees spouses and adult children

• All employees parents, parents-in-law, and stepparents

Groups Eligible to Apply for Coverage

• Proposal for regulations:

• Retirees parents, parents-in-law, and stepparents

• Spouses of adult children

• Unmarried former spouses

• Adult foster children

• Unmarried brothers & sisters*

You Choose:

• Weekly Benefit:

• Between $400 and $2,000

(in $50 increments)

• Length of Policy:

• 3 years, or

• 5 years, or

• Lifetime (most expensive)

Pool of Money

• For 3 or 5 year policies, your selections create a Pool of Money

• Weekly Benefit x 52 weeks/year x Length (Years) of Policy

Example:

$700 x 52 x 3 = $109,200

Pool of Money

• Benefits paid reduce the pool of money

• Pool gone = end of insurance

• Lifetime coverage has endless pool (and costs the most)

Waiting Period

• Number of days of covered care you (or other ins) pay for, before LTCI begins to pay

• Standard policy = 90 days

• Option for shorter such as 30 days

• Not calendar days; days of care

• Shorter = more expensive

Inflation Protection

Select one of two options:

1. Compound (preferred)

Weekly benefit and pool of money automatically increase every year.

Premiums remain level.

Inflation Protection

OR you can select:

Future Purchase Option

Every 2* years the weekly benefit and pool of money automatically increase based on an outside index (e.g., CPI-W).

Premiums increase too.

Benefit Levels

Up to 100% or up to 50% of the maximum weekly benefit

Based on:

• the type of care

and

• use of care coordination

Benefit Levels

• Up to 100% of maximum Weekly Benefit for:

• Nursing Home expenses

• Assisted Living expenses

• Hospice care expenses

• Respite care expenses (4 weeks/year limit)

Benefit Levels

• Up to 100% of maximum Weekly Benefit for:

• Home care

• Home health care

• Adult day care

IF you USE the care coordination program

Benefit Levels

• Up to 50% of the maximum Weekly Benefit for:

• Home care

• Home health care

• Adult day care

IF you DONT use the care coordination program

Care Coordination Program

A strong program can:

• Obtain provider discounts

• Know about quality and range of available services

• Be available to parents of insured employees* who need help

Trained Care Coordinator

Can come to your home to:

• Develop plan of care to meet your needs & preferences

• Assess need for home mods or DME

• Authorize up to 100% of your weekly benefit for reasonable expenses, incl. informal care and care by family members

Premiums

• Based on your age when you buy the coverage

Younger = lower premiums

• Based on your choices of:

• Weekly Benefit,

• Length of Policy,

• Waiting Period, and

• Inflation Protection

Premiums

• You pay 100%

• No Government contribution

• Anticipate savings of 15-20% vs. standard private policy

• Better value

• Premium stability

When Benefits Start

A few* things need to occur:

1. You are unable to perform 2 of 6 Activities of Daily Living (ADLs) or have severe cognitive impairment

2. Condition certified to expect to last at least 90 days (only for ADLs) *

When Benefits Start

3. You pay for covered services for the number of days in the waiting period you chose

Activities of Daily Living

• Bathing - Eating

• Toileting - Transferring

• Dressing - Continence

• Standby assistance

Severe Cognitive Impairment

• An impairment in:

• Short or long-term memory; or

• Orientation as to person, place and time; or

• Deductive or abstract reasoning

Severe Cognitive Impairment

• Placing you in jeopardy of harming yourself or others

• For example:

• Advanced Alzheimers

Waiver of Premium

Once you need help with 2 ADLs (or have severe cognitive impairment) and contact the Care Coordination Program:

• You dont pay premiums during waiting period or in claim status

Tax Treatment

• Tax-qualified under HIPAA

• Fully portable

• Premiums are medical expenses subject to 7.5% rule for deductibility

• Pending legislation for full tax deductibility (H.R. 831, S. 627*)

• Benefits paid are not taxable

Underwriting

• For employees and members of the uniformed services and possibly* their spouses:

• Guarantee issue *, or

• Modified guarantee issue, or

• Short form

• All others = longer underwriting

Sample Underwriting Questions
(Modified Guarantee Issue
and Short Form)

• Do you currently need or receive help with any of these activities: bathing, eating, dressing, toileting, continence, or transferring from bed to chair?

Sample Underwriting Questions
(Modified Guarantee Issue
and Short Form)

• Within the past 12 months have you been confined to a nursing home or custodial care facility, or are you currently receiving home health care services?

Sample Underwriting Questions
(Short Form)

• Do you currently use mechanical devices such as a wheelchair, walker, crutches, hospital bed, dialysis machine, oxygen, or stair lift?

Sample Underwriting Questions
(Short Form)

• Have you been diagnosed with or had symptoms of Alzheimers disease, dementia, organic brain syndrome, multiple sclerosis, muscular dystrophy, ALS, or Parkinsons disease?

Sample Underwriting Questions
(Short Form)

• Have you been diagnosed with or treated by a member of the medical profession for AIDS or AIDS related complex?

Sample Underwriting Questions
(Short Form)*

• Have you been diagnosed with an ongoing mental or nervous disorder, whether organic or inorganic? *

Other Possible Options

• Limited payment plans
  (e.g., 10-year; 20-year; paid-up-at-65)

• Spousal discounts

• Downgrades

Other Program Features:
OPM on Your Side

• Employer-sponsored

• Important to Govts overall compensation pkg

• Contemporary and evolving

• Carriers among best in business (customer service, financial strength, premium stability)

Other Program Features:
Non-Standard Policies

• Possible alternate policies or services for employees and members of the uniformed services who do not pass underwriting

Other Program Features:
Claims Disputes

You can request an independent third party review of the carriers decision on a claim

Open Season

• Dont worry, be happy:

• Carrier will do most of the work!

• Employees will request enrollment kit from carrier, not you

• Employees send application back to carrier, not you

Open Season

• You do NOT need to become an LTC expert!

• You will schedule sessions in auditoriums, etc., but carrier will do training and education

• Well have satellite broadcasts, maybe cable tv shows, etc.

Open Season

• Carrier will send pamphlets, etc., to regular agency distribution channels -- you give them to employees

• Toll-free number for more info and enrollment kit

• Maybe tent cards, CD-ROMs, posters, etc.

Open Season

• Probably phased-in across the country, sometime before or after* October 2002

• True challenge to give full access and still process all the applications

Payroll Deduction

• Carrier will contact payroll to start deducting premiums

• Payroll sends premiums to carrier, not OPM

• We have a payroll taskforce looking into the logistics

• But we cant do too much until we have carrier(s)

Payroll Deduction

• More details later, e.g.,

• Nonpay status

• Insufficient pay

• Transfer to another agency

• Enrollment for new employees

• Subsequent open seasons

• ETC.

Benefits Administration Letters

• Stay tuned to BAL Series 900

• Our main vehicle for passing on information is our web site: www.opm.gov/insure/archive/ltc ltc@opm.gov (for email)*

LTCInfo Email Listserv*

• Read BAL 01-903 dated May 15

• Subscribe even if youve already subscribed to the BENEFITSINFO listserv

Our Next Steps

This month - Issue RFP

Aug/Sep - Evaluate proposals

Oct 2001 - Award contract

Then - Education, marketing, etc.

Coverage begins NLT

October 2002

Questions?