Insurer Did A ‘Bait And Switch’ On Long-Term Care Rate Hike For Feds, Lawmakers Say

2
>>Follow Matzav On Whatsapp!<<

Congress wants to know exactly what led to an explosive rate increase for 274,000 current and retired federal employees who are buying long-term care insurance.

A bipartisan group of lawmakers on the House Oversight and Government Reform Committee demanded documents from the Obama administration this week showing how it arrived at a seven-year contract with the John Hancock Life and Health Insurance Company that allows premiums to spike by up to 126 percent. The average increase of 83 percent will translate to $111 per month, officials said.

The lawmakers — Chairman Jason Chaffetz, R-Utah, top Democrat Elijah Cummings, D-Md., Rep. Mark Meadows, R-N.C., and Rep. Gerald Connolly, D-Va. — have asked for the contract awarded to the company in April by the Office of Personnel Management. They also want contracts covering the previous eight years the company provided long-term care insurance for federal workers — and all documentation supporting John Hancock’s actuarial claims that it needed to hike rates to cover projected payouts for care.

The Aug. 23 letter to John Hancock Financial Services President Craig Bromley also asks for seven years of quarterly reports showing investment returns on the insurance program’s assets.

The premium increases, announced this month, are set to take effect Nov. 1 for policyholders to maintain their current levels of coverage. The new rates do not apply to those enrolled before Aug. 1, but do apply to people who had rates quoted to them before then but who had not formally enrolled.

Long-term care policies offer in-home, nursing home care and assisted-living benefits for retirees with certain physical or mental limitations.

Also, Maryland Democratic Sens. Ben Cardin and Barbara A. Mikulski wrote to Office of Personnel Management Acting Director Beth Cobert and declared themselves “flabbergasted” to learn of the rate hike.

Here’s an excerpt:

“… Many (current and retired federal workers) are on fixed incomes or coming off a three-year pay freeze and substandard pay raises since then. They are being asked to pay an additional $111 per month, on average. This is unacceptable, and so are the alternatives: a reduction in coverage to keep premiums at their current level, taking a ‘contingent benefit upon lapse’ for those who are eligible, or dropping coverage altogether.

“How could professional actuaries, financial advisors, risk managers, and other experts be so wrong? We are left to wonder whether the issuer, which has no competition, has engaged in a sort of classic ‘bait-and switch’ by luring customers with what appears to be affordable coverage and then jacking up the premiums. In either instance, the Office of Personnel Management (OPM) has failed to meet its oversight responsibility.”

Cardin and Mikulski asked the agency to extend by 60 days the Sept. 30 deadline for signing up for a plan.

Since the announcement, employees have been livid over what is apparently an unprecedented increase for a federal benefit.

The last premium increases in the program came in 2009.

Sam Schumach, an OPM spokesman, said Friday in an email that the agency and John Hancock “have recently conducted in-person briefings to congressional staff members on the Federal Long Term Care Insurance Program, processes, and options available to enrollees, including our work to mitigate the increased cost. OPM continues to work with members and their staff to provide them additional information as requested.”

(c) 2016, The Washington Post · Lisa Rein 

{Matzav.com}


2 COMMENTS

  1. They have no right excluding smokers, it is not illegal or immortal and these rashoyim demand more gelt, I am alone in this mishagas?? Stop the freeloading and allow me the kavood of desent insurance. Yes

  2. These disgusting politicians are really QUICK in seeking answers for “Government Workers” but when it comes to US, The People, WE are left holding the bag. The government workers suffered a 3 year pay freeze? Well, I say Big Deal. In the past decade I went five years with NO pay increase and several pay REDUCTIONS, and This is from working in the STEM industry. Right now I have NO health insurance and will have to wait until I’m eligible for Medicare. And these people have the gall to complain, And do NOTHING for anyone NOT in government. Clearly these people do NOT live in the real world.

Leave a Reply to European chosid Cancel reply

Please enter your comment!
Please enter your name here