Open season for this new program is underway. You have from now until December 31 to decide if you are going to apply for this important new benefit that's available to Federal workers, members of the uniformed services, retirees and members of their families. I want you to encourage you to take time out from your busy schedule to consider long term care insurance. Sit down with your family and financial advisor. Purchasing long term care insurance is a protection that can protect your financial security and your independence in the years ahead.
OPM is committed to providing you with the information you need to make an informed decision whether the long term care insurance program is right for you. We've teamed up with Long Term Care Partners, the new company formed by John Hancock and MetLife to offer this important new benefit, and we've planned an extensive educational campaign.
As we've discussed in previous broadcasts, many of us will need long term care at some point during our lives, and not necessarily in our old age. Over 40% of long term care recipients are younger than 65. Think, for example, about people who need continuing care after a serious accident or a stroke or someone suffering from multiple sclerosis.
Unfortunately, although long term care can be costly, few of us have a plan to pay for it. In fact, long term care is the largest uninsured financial risk facing Americans today. Too many people end up impoverishing themselves, giving up assets accumulated over a lifetime when they need to pay for care. They are forced to leave to others the decisions about the type and quality of long term care they receive.
There is a better way. By offering you the option to purchase your own insurance, OPM is empowering you and millions of others in the Federal Family to protect your hard-earned savings and preserve your choices.
Today's broadcast will provide you with an excellent overview of the features and benefits of the long term care insurance program. Our panel will also discuss the many ways you can get more information about the Federal Program. Let me highlight just a few of them.
Long Term Care Partners already has begun the first of some 2,000 educational meetings it will hold at federal agencies, military installations and communities across the country. These meetings will offer many of you the opportunity to get answers to the questions you have about options available to you under the Federal Program. If you are unable to attend a meeting in person, you'll be able to view the on-line version on the long term care partner's web site, www.LTCFEDS.com. While you are there, you can use a host of interactive tools to determine what coverage is right for you and possibly even apply online. Moreover, certified long term care insurance consultants are available by phone seven days a week to discuss your specific needs.
In a moment, you'll hear from a few of the thousands of people in the Federal Family, who, like me, have already enrolled in the Federal Long Term Care Insurance Program. You too can take personal responsibility now to secure your future and give a great gift to your family members or other potential caregivers. By purchasing long term care insurance, you gain security and the peace of mind in knowing that you can maintain your financial independence and personal dignity if you're one day unable to care for yourself. Your family gains security because they know they will have the best possible options available to them in the event that they have to make one of life's most difficult choices regarding the care of a parent or loved one.
Between today and the end of open season on December 31, I encourage you and your eligible family members to give serious consideration to applying for this indispensable protection.
Doris Werwie: Well, I chose the Federal Long Term Care Insurance Program because I am a federal employee and I think there are going to be a large numbers of federal employees that apply for this program so that will keep the costs down so it will be cheaper than other programs would be. It is easy. I can take it out of my payroll check.
Jack Curley: My wife and I chose the program for a couple of reasons. Obviously cost was a big factor. The other thing is knowing that the Federal government is behind the program. I work in an industry that regulates insurance companies. I see insurance companies go out of business, all sorts of problems with them. I know that the Federal government is going to stand by this program.
Len Zuza: As I look to healthcare and as I look to long term care, I realize these are subjects that are very complex. I don't have the expertise or time to dig into them as fully as I would like. That is why I believe the research that OPM does, the information it provides, generally does winnow out weaknesses and eliminate problems more so than a commercial policy that the average person as they compare would not be able to find as quickly or easily.
Bob Goldstraw: I think there are two main reasons why I prefer the Federal Long Term Care Insurance Program. The first is the flexibility in terms of the -- you have a choice of several different benefit options. You can tell the premium amount you're going to pay. I ended up through the benefit options available a premium that's under $50 a month because I really wasn't interested in laying out $200 or $300 a month to get this. It's quite comprehensive, nevertheless.
Secondly, I'd say there's a certain feeling of security with the fact that it's backed by OPM, sponsored by OPM. There's a connection that I think -- it would make a lot of people feel safer.
Sally Schloss: When you see the value of it, you consider it a financial necessity. It's like if I have to have car insurance, have I to have car insurance. If I have to have homeowners' insurance, it's not a luxury item. It's necessary, as necessary as the other things.
Leslie Hegamaster: You can run right through hundreds of thousands of dollars very quickly. So it's -- it will be the best spent money I've ever spent, even if I never have to use it.
Donald Couture: Well, anyone who's had a parent that has been ill understands the importance of long term care insurance. It's not clear how illness will strike in the future. And it's very important that everyone be prepared for the worst and hope for the best.
Doris McMillon: Hello, everyone. I'm Doris McMillon. Welcome to our third broadcast on the Federal Long Term Care Insurance Program.
Now today we're going to discuss specific details of the Federal Program, the nuts and bolts, if you will, to help you understand the types of decisions you'll need to make when applying for this coverage.
By now many of you have received an application package in the mail and may have questions about how to complete it. Or you may need clarification about what will happen once your application has been submitted. Representatives from Long Term Care Partners, the company formed by John Hancock and MetLife to administer the Federal Long Term Care Insurance Program, are here to address some of these issues.
Our first panelist is Jodi Anatole, the long term care insurance program design manager for Long Term Care Partners. She has had extensive experience with long term care insurance. She has been with MetLife's long term care insurance organization for 13 years and has had responsibility for sales, marketing, and account management for their long term care insurance business, as well as product development responsibility for MetLife's employer group, association and individual long term care insurance products. Thanks for joining us, Jodi.
Jodi Anatole: Thank you, Doris.
Doris McMillon: Next we have Peggy Murray, Director of Underwriting for Long Term Care Partners. She joined Long Term Care Partners after 15 years of underwriting product and marketing experience with two other large long term care insurance carriers. She also spent five years as a medical claims manager involved in catastrophic claims management and fraud prevention. Prior to that she was a nurse in Portland, Maine. Welcome, Peggy.
Peggy Murray: Thanks, Doris.
Doris McMillon: Our third panelist is Mary Lou Asbell, the Director of Claims Administration for Long Term Care Partners. She is a registered nurse, most recently serving as the executive director of a home healthcare agency and as the licensed administrator of a combined assisted living and nursing home facility. Her community and long term care experience including counseling and case management of clients and families in crisis situations. She has just been appointed to a second term on the New Hampshire Board of Nursing where she served as the specialist representative for long term care issues. It's good to have you, Mary Lou.
Finally we are joined by Frank Titus of the U.S. Office of Personnel Management. He is OPM's Assistant Director for Long Term Care and its Acting Associate Director for Retirement and Insurance. He is a 30-year veteran of the government's retirement and insurance programs and is currently directing a small office devoted to implementing OPM's newest and largest benefit program, the Federal Long Term Care Insurance Program. He has held every executive level position in OPM's Retirement and Insurance Service except that of Chief Actuary and his accomplishments have produced many awards, including two Presidential Rank Awards for Meritorious Service. Nice to see you again, Frank.
Frank Titus: It's great to be back.
Doris McMillon: Let's hear from our panelists. Jodi, let's start with you. Our viewers are interested in learning details of the new Federal Long Term Care Insurance Program. Tell us about the insurance itself and specifically what choices do people need to make as they prepare to apply for this coverage?
Jodi Anatole: Doris, I would love to do that. There are six important decisions people will need to make during the enrollment process. I will go through each of these decisions.
Decision number one is the type of coverage that someone would like, whether it's comprehensive coverage or facilities-only coverage. And the slide we have shows the comprehensive coverage covers a variety of settings such as assisted living facilities, nursing homes, care in the community, such as an adult day care center or at home. The facilities-only plan covers care in a facility, not care at home.
Doris, the great thing about the comprehensive plan is that it covers not only formal care but informal care from family members, friends, and neighbors. As long as the caregiver didn't live with you at the time you become benefit eligible, that person can be covered as a provider under the program and in addition, family members can be covered for as much as 365 days under the program.
Doris McMillon: The second decision?
Jodi Anatole: Sure. The second decision is your daily benefit amount. The daily benefit amount is the maximum amount that the plan will pay for each day that you receive care. And we have a wide variety of daily benefits ranging from $50 to $300 a day in $25 increments. Up to 100% of the daily benefit is available for care in a facility and up to 75% of the daily benefit is available for care at home. So, for example, if you selected $100 daily benefit, you'd have up to $100 a day for care in a facility and up to $75 a day for care at home.
It's very important, Doris, that people understand what care costs in their area as well as how much they can afford to pay out of their pocket. We've provided tools to help you with this. You can go to our web site, call our call center and the information kit also includes information regarding that.
Doris McMillon: If you select a comprehensive plan, what's the third thing you have to consider?
Jodi Anatole: You will have a choice whether you want your benefits to be paid on a daily basis, as I explained, or a weekly basis. Weekly is equivalent to seven times your daily benefit. That, for example, would be $700 a week. The advantage of the weekly, it provides you with additional flexibility, particularly when you are at home and receiving home care services.
Doris McMillon: Let's talk about the fourth decision.
Jodi Anatole: The fourth decision is your benefit period. We have a choice of three benefit periods, three year, five year and unlimited. I think the unlimited speaks for itself--the benefits under the program are unlimited.
The three year and five year are actually used as multipliers to determine the maximum lifetime benefit under the program. I think you may have heard of this term, a pool of money.
Doris McMillon: Okay.
Jodi Anatole: The slide shows an example where if you have a $100 daily benefit and you have a three year benefit period, three years is equal to 1,095 days so your maximum lifetime benefit would be $109,500. Keep in mind that if you receive care that's less than your daily benefit or you don't receive care every single day, your maximum lifetime benefit will be the same amount of money but the benefits can extend longer than three years.
Doris McMillon: The fifth decision?
Jodi Anatole: Decision number five is the waiting period, similar to a deductible you might have with other insurance. It's the length of time you are eligible for benefits and receiving covered services. You have the choice of a 30-day or 90-day waiting period. The great thing is there is only one waiting period in your lifetime that you need to satisfy.
Doris McMillon: We're coming down to the sixth and probably the most important decision.
Jodi Anatole: It's the inflation protection decision. You want to make sure that the benefits you're buying today are going to keep pace with inflation in the future. The program's been designed with two inflation options.
The first is the automatic compound inflation option, where each year your benefits increase by 5% compounded annually with no increase in premium. In addition, if you are receiving benefits under the program, your benefits will also continue to increase.
The second option is the future purchase option. Every two years, we'll make an offer for you to increase your benefits. It'll be based on the medical component of the consumer price index. And at the same time, your premiums will also increase. This offer is made as long as you're not eligible for benefits and as long as you have not declined three offers in the past.
What is really unique about this program is that each time we make you an offer for the future purchase option, we're also going to give you the opportunity to switch over to the automatic compound inflation option with no evidence of good health, and taking into account the fact that you've been covered under the program.
Doris, I know inflation options are complicated. We have a slide up for our viewers that shows the two different inflation options. On both the slides, the green line shows the premium and the orange line shows how the benefits are changing. For the automatic compoubd inflation option, you will see your premiums remain constant while your benefits are increasing. For the future purchase option you will see that both the premiums and benefits are increasing. The graphs represent a 30-year period so you need to take into account the amount you may pay initially, under the automatic compound inflation you will pay a higher initial premium. But under the future purchase option you will see as you get closer to retirement years, you will end up having to pay a greater premium if you take each of the inflation offers that are offered to you. It's important to keep that in mind as you make your decision.
Doris McMillon: I mean, that's a lot to consider. Does the Federal Program have anything that might simplify the application process for me?
Jodi Anatole: Absolutely. We know, it's a complicated decision process so we've actually created four prepackaged plans for people to look at. The prepackaged plans are terrific because you only have two decisions, Doris. The first one is which one of the prepackaged plans you want and the second decision is your inflation option. Each of the prepackaged plans have a daily reimbursement, a 90-day waiting period and range in the type of services that they provide, from a facilities-only, that has a three-year benefit period, to a comprehensive plan with an unlimited benefit period. So there's a variety to meet varying budget neets needs.
Doris McMillon: We haven't talked about price yet. I'm sure cost is probably on the minds of everybody watching. What can you tell us about the premiums of the federal long term care insurance program?
Jodi Anatole: You're absolutely right. Everybody wants to know what the cost is of the program.
Let's begin with the fact that the premiums are 100% paid by the enrollee. Secondly, the premiums are based on your age when you buy. For open season, everybody's premiums are based on their age as of July 1, 2002. As Frank Titus likes to say, nobody ages during open season. In addition, the premiums are based on the options that you selected.
Doris McMillon: So can we see some sample premiums?
Jodi Anatole: Great question. We have a slide for our viewers that give examples of the prepackaged plans that we have. These are biweekly premiums, and if we look at the slide, you will see for a 45-year-old who has selected the comprehensive 100 plan, the premiums are $24 per pay period and the same person who selected the future purchase option will pay a premium of $7.56 per pay period.
Premiums are also available on our web site where we have a rate calculator, available through your call center and our information packages actually include personalized premiums for those people that request it.
Doris McMillon: Thanks a lot, Jodi. I think you clarified a lot of the specific benefits of the Federal Long Term Care Insurance Program.
I would like to turn to Peggy. We know some of the details about the program but I guess, it would help if you reminded us who was eligible to apply.
Peggy Murray: I would be happy to do that.
The legislation that enabled OPM to offer long term care insurance to the Federal Family actually outlines the specific individuals who are eligible to be insured. As you can see from the list, it really encompasses a very wide variety of the Federal Family.
[Graphic: Who is Eligible to Apply Employees --Federal and Postal employees --Members of the uniformed services Annuitants --Federal and Postal 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 of living employees]
I think that perhaps the most important segment that's included are the parents, the in-laws and the stepparents of the active employees. We know that six out of 10 of every person that gets to age 65 is going to need some level of long term care. That's going to impact not only the individual that needs the care but also their children, who are very often the ones that provide their care. And for that reason, we're recommending that everyone go out and talk to their eligible family members about this important coverage.
Doris McMillon: Absolutely. Now, does anyone who applies automatically get accepted into the program?
Peggy Murray: No, that's not how this kind of insurance works. All applicants have to go through some level of underwriting. Underwriting is the process by which we evaluate an individual's health status to determine if they are going to be eligible for the coverage. This is necessary for this kind of insurance coverage that's voluntary and paid for entirely by each individual insured. And it's necessary for a couple of reasons.
One is, that we don't want to insure only people that have a high likelihood of needing long term care services in the foreseeable future, and the other reason is we want to keep the premiums affordable and stable over the long term.
Doris McMillon: Given the nature of this type of insurance coverage, I guess going through underwriting makes a lot of sense. Does everyone undergo the same type of underwriting or does the process vary?
Peggy Murray: There are two kinds: abbreviated underwriting and full underwriting.
Active employees and their spouses will undergo abbreviated underwriting. They will be asked seven questions, spouses will be asked nine questions. Those questions will cover things like current need for long term care services and as well as other conditions that lead to long term care need.
Doris McMillon: What is full underwriting and who goes through it?
Peggy Murray: All other eligibles will go through full underwriting. It's a more extensive process. We're going to look at a complete health history of the individual that's applying, we're going to want to know about treatments and medications that they might be taking and we're going to ask some questions about lifestyle, things like their daily activities, height and weight, smoking habits, things like that.
Doris McMillon: Are there other variations in the underwriting process?
Peggy Murray: Yes. Because the applications are used for all ages, we do have some other tools we use to help us get additional information from certain applicants. For example, we do require additional medical information for those abbreviated applicants applying for the unlimited benefit period. We also get additional information from full underwriting applicants, age 65 and over.
Doris McMillon: Now, if I'm approved, when does the coverage become effective?
Peggy Murray: That's a really important question. The coverage will be effective on October 1, 2002, or the first of the month following the month during which the person is approved by underwriting, whichever is later.
Doris McMillon: Now, I think we all better understand the underwriting process. Thanks a lot.
Let me come back to you, Mary Lou. Once I've gone through underwriting and been approved, what access to services do I have?
Mary Lou Asbell: It's a very strong care coordination focus. We consider it one of the major strengths of the program. You and your uninsured qualified relative can take advantage of this right after enrollment has occurred. So long before you're dependent or eligible for benefits, you may have a caregiving issue that the care coordinators would be there to advise and help you with. In fact, those people that have come in during the early enrollment have already begun calling us and we have done a fair amount of long distance planning for relatives, frequently elderly parents that live across the country.
Care planning is a big part of the care coordination service, and that's where we feel as care coordinators we bring our experience and knowledge to work for you. When you make that first call, the care coordinator begins to do a needs assessment of you and the environment you live in. By talking with you and your family or your doctor, another health care professional, we're able to start gathering the information we need to identify your needs.
Doris McMillon: Now you mentioned qualified relatives. What if any access to coordination to they have?
Mary Lou Asbell: Qualified relatives have access to all the care coordination services, even if they are not enrolled in the Program. There is no charge for the information and referral type things that we do. If a nurse needs to go into your home and do a full-care plan, there is a charge for that.
Doris McMillon: Mary Lou, tell us more about the long term care coordinators.
Mary Lou Asbell: At Long Term Care Partners, we care, coordinators are your advocate. That's what we're there for. We are registered nurses who have lots of experience in dealing with the health care delivery system, and that in itself can be pretty daunting. We also have a fair amount of experience in the various long term care settings such as nursing homes, assisted living, home care, hospice and adult day programs. So we get to bring that background into the experience with us and that allows us to help give you the advice that you need, and also make the alternatives that are available to you very well known.
Doris McMillon: All right. Let's get back to how all this works. How do the care coordinators obtain the information that they need?
Mary Lou Asbell: Actually, all of that information can usually be obtained by telephone. Remember, that we are experienced nurses and though these issues may be very stressful and foreign to you and your family, we deal with them everyday. So, we work with them very easily. If we need more information, we can send a nurse into the home and actually evaluate you and the environment that you live in. Now, this is really important if, for instance, you live alone, or perhaps there might be mobility problems where the nurse, being on site can actually visualize safety hazards or maybe even identify some of the adaptive equipment that would make it safer for you to live at home.
Doris McMillon: How does someone qualify for claim payment under the Federal Long Term Care Insurance Program?
Mary Lou Asbell: It's easy. The legislation in 1996 adopted standardized criteria for benefit eligibility for the entire long term care industry. That eligibility includes dependency in activities of daily living or a cognitive impairment. The Federal Program has taken the most liberal view of this by requiring assistance in only two of the six activities, and I think we can look at what those activities are now. The other point is that the Federal Program has taken the liberal view in allowing both hands-on assistance as well as stand-by. In many long term care insurance programs you have to actually have somebody physically assisting you to do the activity before you qualify. The Federal Program allows you to be eligible for benefits at an earlier time.
The severe cognitive impairment criteria involves somebody that requires constant supervision because they've been deemed at risk to themselves or others. A common example is one whose cognitive impairment has caused a severe memory loss and they may wander off and get lost. Unfortunately, we've all heard those kinds of stories. So, in addition to the activities of daily living and the cognitive impairment criteria, we require that approved plan of care to be in place which we discussed a few minutes ago.
Doris McMillon: Great look at claims and the benefit eligibility process. Let's come to Frank. We heard the Federal Long Term Care Insurance Program offers an impressive array of benefits to the Federal Family. Why did OPM decide such a program was necessary?
Frank Titus: Well the benefits are impressive.
As you know, Doris, we administer the health benefits program and really have since its inception in 1960. We're acutely aware that the program simply does not cover long term care, and we were also acutely aware that Medicare doesn't cover it. And we know that looking at the demographics of the work force, that people are increasingly realizing that long term care is an important benefit. Especially us baby boomers, whose parents are frequently in a position where they're encountering the need for long term care. And that creates stress. And one of the things that our program will do is, alleviate some of that stress by providing access to care coordinator for qualified family members, even if those family members aren't policy holders.
Doris McMillon: There are many companies offering long term care insurance today. What makes the Federal Program a great choice?
Frank Titus: We have a slide on that. I will go through it quickly. Actually, most of the things the slide addresses have been spoken to.
Peggy, for example, spoke about abbreviated underwriting. One of the things she didn't say is that there's no guarantee that abbreviated underwriting will be offered again. During this open season, it's there, it's a real advantage, people need to take advantage of it.
Jodi mentioned the expansive informal care benefit. And emphasized a unique aspect of our program that makes coverage available not only to informal caregivers, but also to family members, so long as they didn't live with you at the time you became benefit eligible. We have international benefits, which is unique to our program.
Jodi also spoke about our very, very strong inflation protections and the fact that we are about the only program that offers people the opportunity to switch from future purchase option to automatic compound inflation protection at every opportunity that they are offered an increase in benefits.
And finally, Mary Lou spoke about our strong care coordination program and how those care coordinators are advocates for our policyholders and how they are available to family members to relieve employee caregivers from the stress they can encounter in that role.
Doris McMillon: You mentioned OPM oversight as a plus for the Federal Program. I think we saw earlier testimonials from federal employees who feel more secure knowing the role that OPM will have in overseeing the Program. What will OPM do to assure it will continue to serve enrollees well?
Frank Titus: I think that's one of the most important parts of this program. I think the OPM oversight, what I call OPM on your side simply can't be overstressed. We went through a very rigorous process to select John Hancock and MetLife as our carriers. We know how strong they are. A unique aspect of our program is that their profit is at risk. A large part of it is at risk based on their performance and each year we'll evaluate their performance and determine the appropriate profit. What's that mean? Well, that means they have to keep this program current. We need to keep it current because it's an important part of our benefit package. If it's not current, it's not a viable component of the government's compensation package. The fact that the profit is negotiated means that Long Term Care Partners has no interest and the care coordinators have no interest in withholding any services, any benefits because that money doesn't fall to their bottom line. It's -- it stays within the program for future benefit enhancements.
Doris McMillon: I think you made the case that the Federal Long Term Care Insurance Program is a good deal. We heard from Peggy that everyone has to go through the underwriting process to enroll in the program. What happens if people don't pass underwriting?
Frank Titus: Well, that is going to happen to some people, Doris. And that's another good example of OPM on your side. Because we made sure that our program had something for everyone. So for the annuitant population and other folks that undergo full underwriting, if they are not able to qualify, we have a service package. For a modest amount of money it gives them access to our care coordination services and discount provider networks. For people who undergo abbreviated underwriting, such as employees, many of them who don't pass underwriting will be offered as an alternative a nursing home only policy--but still an insurance policy that's being made available to folks who absolutely would be uninsurable elsewhere.
Doris McMillon: I have a question I'm sure you will be very happy to answer. How can people find out about the Federal Long Term Care Insurance Program?
Frank Titus: Lots of ways. And our Director mentioned a number of them.
The thousands of meetings we are going to have, the 800 number that's on the screen now where we have certified consultants who can provide advice and assistance and answer individuals' questions about long term care insurance.
And we've also mentioned the web site--Director James, who is a huge advocate of long term care insurance and was our very first enrollee, encouraged you to visit our web site and see the many tools that we have there to help you make your decision: a premium calculator, calculators that will tell you what the cost of care is in your area, a scheduler that will allow you to see where the employee and annuitant meetings are being held and even register for them or if you don't have web access, again, use our 800 number. Our counselors know where the meetings are. They can help you find one in your area.
So we have lots of ways. And lots of vehicles and lots of help.
Doris McMillon: You literally said thousands of meetings. That's a couple of thousand, isn't it?
Frank Titus: That's 2,000 scheduled.
Doris McMillon: Wow. Thanks a lot, Frank.
Frank Titus: Thank you.
Doris McMillon: Let's hear from Paul Forte, C.E.O. of Long Term Care Partners, the company formed by John Hancock and MetLife dedicated to the Federal Long Term Care Insurance Program. Let's take a look.
Paul Forte: Hi. I'm Paul Forte, Chief Executive Officer of Long Term Care Partners, a joint venture between John Hancock and MetLife created to administer the new Federal Long Term Care Insurance Program.
I'm speaking to you from our headquarters in Portsmouth, New Hampshire, close by the vibrant New England seacoast. Our facility, which has 32,000 square feet and is equipped with the latest technology, will eventually be home to 150 Long Term Care Partners associates and will enable us to provide all of the services necessary to run the program, including marketing, underwriting, customer service, care coordination and claims.
Open season began on July 1 and is off to a fast start. It will involve the most extensive education and awareness campaign on long term care insurance ever conducted in this country. You've probably seen our excellent marketing materials which make long term care insurance easy to understand. Our toll free line features experienced representatives. We have a powerful web site which has all of the information you'll need to make informed decisions about whether long term care insurance is right for you. In addition, we will hold some 2,000 meetings across the country to talk about program details and options. I urge you to plan on attending a meeting at a time and a place convenient for you. The Federal Long Term Care Insurance Program is expected to be the largest long term insurance care program in the world. The staff of Long Term Care Partners is committed to making it the most innovative and affordable program.
Given the extraordinary efforts of the U.S. Office of Personnel Management, which has directed the planning of the Program and serves as regulator, I have no doubt we will succeed.
On behalf of everyone at Long Term Care Partners and John Hancock and MetLife, thanks for your interest and best wishes for open season.
Doris McMillon: Well, now it's time to hear from you our viewers. I know you have a ton of questions. We will go to the phone, read to the faxes, e-mails to address some of the questions you have.
Frank, you mentioned saving with group rates, do you want to expand on that?
Frank Titus: We are a big program and because we wanted to be very, very careful, we required that Long Term Care Partners, MetLife and John Hancock use the new N.A.I.C. model guidelines for pricing. These are brand-new, relatively brand-new, they only came out in August of 2000 and we are one of the first major policies that has used them.
Because they are conservative and designed to produce stable premiums, that also means premiums that are a little bit higher. Because our program is so big, we know we will be marketed against and we know that some of that marketing is going to be by agents who say, I can give you a discount because you're a preferred risk or I'll give you a discount because you're a couple. And some people have asked, well, why aren't those discounts in our program? Well, there are. We accounted for them, but we chose to give everyone the lowest possible premium instead of targeting discounts to segments of our population.
I talked about OPM on your side. We may not always be the cheapest guy in town, but when you look at our benefits, the international benefit, the expansive informal benefit, some of the other aspects of the program our panelists have talked about, you'll find we are the best value in town.
Doris McMillon: All right. Thanks so much, Frank. We have a telephone call coming in. This one comes from Cleveland, Ohio.
Caller: Hello. My name is Hugh McKenna. I have a question regarding insurance for a parent. I am an active employee and I have a mother who has high blood pressure and diabetes. Would she pass the underwriting? Is it worth it for her to even try to go through the underwriting process?
Doris McMillon: Peggy?
Peggy Murray: Sure. A lot will depend on the specific control of her hypertension and her diabetes, but as long as she doesn't have to answer yes to any of the specific questions that would automatically exclude an individual on the application, then it's certainly worth sending in the application.
Doris McMillon: Ok, Hugh, thanks for your question. Let's go to Los Angeles. Los Angeles, please go ahead.
Caller: My name is Travis. I want to know whether a person that's H.I.V. positive is an active employee of the federal government eligible for passing underwriting or are they excluded?
Doris McMillon: Peggy?
Peggy Murray: As long as they do not have to answer yes to any of the first questions on the application, then they would be considered to be insurable as active employees.
Doris McMillon: Okay. Thank you so much, Travis. We have a fax that came in. It says, this is Tom from Kansas City. Tom says, "I enrolled in the Federal Long Term Care Insurance Program during early enrollment and would like to make changes to my coverage. How do I go about doing this?"
Jodi Anatole: It's very easy. All you need to do is complete a new application, send it in and it will go through the process. Keep in mind you will not lose the coverage that you have, but if you're changing your coverage options or changing to payroll deduction, we'll look at it and process it.
Doris McMillon: Ok. Thanks so much. We thank Tom for his e-mail. We have a call from Washington, D.C. Please go ahead. Hello, Washington?
Caller: My name is Sue. If have you too many people taking benefits out of the program as the baby boomers age and you don't have enough people paying into the program, what happens at that point?
Doris McMillon: Frank?
Frank Titus: Well, I'll start with that one. That's what insurance is all about. That's why the companies employ these people that are called actuaries, which is that thing I've never been.
But seriously, the actuaries look at the demographics and we take into account the probability of different age groups enrolling. When you look at the premiums, will you see they are age based so the older people are in fact generating more revenue than the younger folks because they won't be generating that revenue as long. In short, all of those things are taken into account and as I mentioned before, we have used very conservative guidelines to make sure that our programs remain stable. If you're looking at a program that has cheaper premiums, you might want to ask about how they were set. If they use pretty aggressive assumptions, you may be looking at a premium increase downstream you're not likely to see in the Federal Program.
Doris McMillon: All right. Sue, thanks so much for your question. Let's go to Kansas City, Missouri. Go ahead.
Caller: My question is, how often are you going to offer the open season?
Doris McMillon: Frank?
Frank Titus: Okay. I think I made the point before about abbreviated underwriting and how important it was for active employees and members of the uniformed services and their spouses to take advantage of it. The reason for that is, we don't know when our next open season will be. We know it's not going to be annual, like health benefits. It's likely we will have one. My guess would be two or three years down the road. The question is, what kind of underwriting will we have? We have abbreviated underwriting again? Will it be as few as seven questions as it is now? I don't know the answer to that. If I was an active worker, I wouldn't take a chance on it. I would enroll now if I determined long term care insurance was something I should have.
Doris McMillon: Thanks for your question. Let's go to Dawn from South Carolina.
Caller: My question is, if you buy the three or five-year plan, and end up living past those time frames, what happens after your benefits run out?
Doris McMillon: Jodi?
Jodi Anatole: I'll take that. Let's be clear about the benefit period. That's the length of time that your coverage will last when you're receiving benefits. So when you ask the question about living past, the assumption is that you're receiving benefits and you've exhausted your three-year benefit period. That is something you need to take into account. Keep in mind that even if you do use up your benefits, you will continue to have access to our care coordination services as well.
Doris McMillon: All right. Thanks, Dawn. Let's go to Wichita, Kansas. Thanks for calling, Wichita.
Caller: Thanks very much. I'm a little confused about the premiums, if I apply and my spouse and my, let's say, a parents, as well, is that three premiums or just the one like you gave the examples of?
Jodi Anatole: The premiums are based on each of your ages when you you enroll, so each one of you has separate premiums.
Doris McMillon: All right. Let's take another e-mail, here. Bryce e-mails us from Huntsville, Alabama. He says I'm trying to compare the Federal Program to another long term care insurance plan. Any advice on how I should evaluate the features of each?
Frank Titus: Many long term care insurance programs will look the same on the surface. But when you get below the surface, you probably are not going to find a program as robust as ours. And there are several areas where you need to sort of peek beneath the water level.
The most important one is probably the home-care benefit. The fact that our home-care benefit includes informal providers that aren't licensed. If you're looking at ay that provides home care but -- a policy that provides home care but only by licensed providers, even if that program pays 100% of its daily Ben eye fit for home care, that probably won't go as far as our 75% payment for home care to an informal provider, much less the fact that we'll cover family members who didn't reside with you at the time you became benefit eligible. So that's a very important difference.
The other big difference is care coordination. Our folks are advocates, our profit is negotiated, as I said. The care coordinators, the insurance companies, have nothing to gain by withholding benefits or services. In fact, if that becomes known to OPM, that would adversely affect their profit. So, that's another area to look at.
And, I guess the third is the premium setting that we talked about. Ask what the assumptions were. Do they use the NAIC model guidelines that were just adopted in August of 2000? If not, then the premiums don't have that added premium stability. That is a feature of the Federal Long Term Care Insurance Program.
Doris McMillon: OK. Thanks so much. Let's take another call from D.C. Please go ahead, D.C.
Caller: My name is Janice and I have a question. Well, two questions, actually. I'm an active federal employee and I wanted to know if I was to leave the government, is this portable and if so, with the cost of the premium -- would the cost of the premium change?
Doris McMillon: Jodi.
Jodi Anatole: The program is portable, which means you can take the coverage with you if you leave and there is no change in your coverage or your premiums.
Doris McMillon: Well that answers it quite well. Thank you very much, Janice for your question and Jodi, for your answer. Let's take another call from Rockville, Maryland. Please go ahead.
Caller: This is Michelle. My question is that if you end up in a nursing home, and, you get sick while you're in are a nursing home and they put you in a hospital, I know for a fact that a lot of nursing homes, if you're in a hospital for more than seven days, you will lose your bed in the nursing home and have to start the process all over. My question is that, what type benefits would you still be able to receive if and when you have to go to the hospital and would the benefits cover the period while you're in the hospital until you can get back to the nursing home?
Doris McMillon: Mary Lou, that sounds like your question.
Mary Lou Asbell: That's a common concern. My experience in a nursing home tell me that. In this program, you have a benefit of 30 days a year for bed reservation, and as you may or may not know, that's a very generous benefit. Many plans give you 10 days, maximum, so 30 days a year, you could be in the hospital and your bed would be held and paid for at the nursing home.
Doris McMillon: All right, thank you very much Michelle. Let's take another call from Indian Head, Maryland.
Caller: My name is Lloyd and my question is, if you're an active federal employee and after the end of the open season period, you want to become married, would you be able to add your new spouse to the long term care insurance and if so, would it be abbreviated or full is underwriting?
Doris McMillon: Frank.
Frank Titus: Well, congratulations on your engagement. Sounds like it's going to go at least through December. But the good news is that your new wife will be able to join the Federal Program with abbreviated underwriting. So, that's one of the exceptions that we made, so that people who join the Federal Family, via marriage to an active worker or member of the military, can enjoy abbreviated underwriting, in the same way as a brand new employee who comes on board in January would have 60 days to sign up for the program. And that's what your new wife would have, 60 days to make her decision, to sign up, and get abbreviated underwriting.
Doris McMillon: It looks like Lloyd's marrying smart. Thanks for calling. Let's take another call. We have Indianapolis, Indiana on the line.
Caller: Would you explain how the premiums for a parent are billed or collected?
Jodi Anatole: Premiums for a parent can be paid in a variety of ways. Through payroll deduction, or direct billed to your parents, there's automatic bank withdrawal. So the same options that are available to you are available to them. But the payroll would be available through the employee's payroll or the member of the uniformed services' payroll.
Doris McMillon: Santa Fe, New Mexico.
Caller: My question is why does it exclude spouses or live-in relatives that choose to take leave -- my husband is also an active federal employee.
Doris McMillon: OK, Frank.
Frank Titus: Sure. The reason that we don't pay for informal care by family members who reside with the policyholder at the time that policyholder became eligible for benefits is because we basically didn't want to be paying benefits for someone who would have been there anyway. For, sort of the built-in caregiver.
The purpose of program is not to reimburse a spouse, because that spouse turns into a caregiver. The purpose of the program is to identify and provide caregivers for people who need care. Including informal caregivers, including a family member, who, for example, maybe goes to a part-time job or quits a job all together to move in with you and to become a caregiver. Now, we could have provided benefits just on a per diem basis, and there are policies like that, but that would have added significantly to the premium that everyone would have to pay.
Doris McMillon: All right. Well, thanks you very much for your question. We have an e-mail from Burke, from Germantown, Maryland. He says is premium conversion available for long term care insurance premiums like it is for health insurance premiums?
Frank Titus: Not yet. It will take an act of Congress to allow premium conversion for long term care premiums. The good news is that there are bills pending that would do just that. So, if you're interested in that, you can find out who's supporting those bills and certainly encourage them to continue to do that.
Doris McMillon: OK. Jodi, I've got two questions and they both go to you. Joyce from Boston says, how long do I have to have my long term care insurance coverage before I can claim benefits?
Jodi Anatole: Joyce, once you're enrolled and once you have your effective date of coverage, you are eligible for benefits after that. Of course, you have your waiting period, but remember, it's your effective date and you're eligible for benefits right after that.
Doris McMillon: Gary from Washington, D.C. says, do I have to continue to pay long term care insurance premiums while I'm receiving benefits?
Jodi Anatole: Great question. You do not pay your premiums while you're receiving benefits. Thank you for asking that question because it's a very important component to the program.
Frank Titus: You might want to add that as a result of the early enrollment opportunity we had that we had some claims for benefits already.
Jodi Anatole: Yes, we do. I think Mary Lou indicated we had people that called in for care coordination services but there are people that have already submitted claims for benefits.
Doris McMillon: We have some e-mails, here. Thomas says are husband and wives plans handled as separate plans or is the pool of money considered combined?
Peggy Murray: Husbands and wives are handled as separate plans. Each one pays a separate premium for their coverage and their pool of money is separate.
Doris McMillon: Can changes be made during the time period that an enrollee is drawing benefits?
Jodi Anatole: The question is once you're enrolled and are receiving benefits, I think it's important that the question is, while you're receiving benefits, can you change your plan provisions, the answer is no. We wouldn't want people to go to a lower-level benefits because they probably need the benefits and any increase in coverage would require underwriting and if you're receiving benefits, you would not pass the underwriting.
Doris McMillon: One more question from Tom. How is the inflation coverage calculated? On the basis of per diem amount of coverage or on the basis of the total pool of coverage?
Jodi Anatole: It's calculated that each year, the benefits, all the benefits increase by 5%, compounded annually. That's the daily benefit, as well as the lifetime maximum benefit increasing by 5%. It's similar to what happens with a bank account, where if you had a $100 daily benefit the first year, the next year that amount would increase by 5%, in the third year, your daily benefit in the second year would increase by 5%.
Doris McMillon: You're going to love this question. Somebody's looking at the news about Enron and WorldCom. What are the guarantees that this program will persist? This question is necessitated by recent large corporations going bankrupt.
Frank Titus: Well, I'll start with that one and see if anybody wants to jump in.
I talked about the rigorous process that we went through to select MetLife and John Hancock as Long Term Care Partners. That included a review of their financial status, and I'm happy to tell you, that both of these corporations are among the highest-rated in the country in terms of financial strength and stability. So, we've got that assurance.
And, the other assurance that you have, is that we require that our funds be accounted for separately. So, we have actually, will have physically separate accounting and physically separate funds, and those funds are not available to even MetLife or John Hancock for any purpose other than paying Federal Long Term Care Insurance benefits. So, even if another part of their business was hemorrhaging, which I doubt, but even if that were the case, our funds would not be available for any kind of bailout. So, I think that's as good a guarantee as you're going to find. Doris McMillon: And on that note, I am so sorry to say, but we are out of time for this broadcast. I'd like to thankal all of our panelists today, our callers and all of you watching this presentation. If you still have questions, please feel free to visit the web site or call the toll free number any time. Thanks for joining us and have a great day. I'm Doris McMillon.