The federal government has suspended for at least two years, the purchase of federal employee LTCIP ( Federal Long Term Care Insurance Program ). Industry experts question whether the program ever will return in its current form.
The insurance company issuing th4ese policies has warned the federal Office of Personnel Management (OPM) that current premiums are unsustainable and it likely will request significant rate hikes.
December 19th is the last day of the program, until further notice. Employees currently covered by FELTCIP will continue to be covered. During the suspension, no policy changes are allowed.
The FELTCIP currently insurances about 267,000. All insured can expect an increase in premiums, in the future. In recent years, the participation of new insureds has dropped to 0.1 percent expressing any interest in the insurance. The low numbers of new enrollees and the high number of cases does not look good for the continuing future of the program.
The federal government program is not alone, as the long-term care insurance industry, due to rising premiums, without a guarantee that future premiums will not rise, has been shrinking for decades.
Incredibility, only about 50,000 people bought long term care insurance nationwide, according to the actuarial firm Milliman.
The high cost of long-term care insurance premiums and decline of purchases has prompted states to help by providing a state sponsored a mandatory long term care insurance. Industry experts have pointed out the protection, in the long run is dangerously low for the high cost of the mandatory payroll withholding.
OPM will be conducting a study, over the next two years to see how the program can be rescued or totally abandoned.
