# Presentation: 167388

## Welcome!

**Federal Long Term Care Insurance Program**
**Frank Titus**
**U.S. Office of Personnel Management**

**Notes:**
Slide 2

Welcome to the Federal Long Term Care Insurance Program Educational meeting.

***Insurance Program***

*  *

**Page 2**

**Notes:**

Slide 2 – official OPM seal
My name is [          ] and I am here to talk to you about the new Federal Long Term Care Insurance Program sponsored by the U.S. Office of Personnel Management (OPM) and offered by John Hancock and MetLife. Because our time together is so limited, I’ll ask you to please hold your questions – I’ll talk about 20 minutes and we’ll have 10 minutes for your questions. 

## A New Partnership

***A New Partnership***

**Notes:**
Slide 4 - Long Term Care Partners

After a rigorous review, OPM selected John Hancock and MetLife as the insurers for the Program because they have the combined experience and resources to get the job done. 
John Hancock and MetLife then formed Long Term Care Partners, a new company exclusively dedicated to serving the long term care insurance needs of the Federal Family. 

## What is Long Term Care?

- 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

**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**

**Notes:**
Slide 5 - What is Long Term Care? 
First, I think it’s important to establish what long term care really means.
Long term care is any type of extended chronic care, generally expected to last at least 90 days
Some people need it for physical reasons
Like needing help with bathing, dressing, transferring
Others need help with cognitive impairment, like Alzheimers
Chart shows only 20% in a nursing home – also beautiful assisted living facilities, but mostly at home

## Anyone Can Need Long Term Care

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

**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 lives****1**
**40% of the people who need long term care today are working age adults (ages 18-64)****2**

**Notes:**
Slide 5 – Anyone Can Need Long Term Care

It might surprise you to know that 40% of people who need long term are ages 18-64

1/3 of the people who have a stroke every year in our country are under 65

Give examples of younger people needing care:  automobile and sporting accidents, MS, Parkinson’s disease, Lou Gehrig’s disease, even early Alzheimer’s

## Long Term Care is Not Routinely Covered by 

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

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

**Notes:**
Slide 6 – Long Term Care is Not Routinely Covered by Medical Insurance or Medicare
Long term care isn’t covered by health insurance, including your Federal Employees Health Benefits Plan, or by Medicare, or by other conventional forms of health care coverage.

## 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**

**Notes:**
Slide 10 - Six Decisions

Six decisions about benefits that impact the cost of your plan
We’ll explain each one

[Do Not Read Slide]

## Decision #1

**Choice of Comprehensive or Facilities-Only**

***Decision #1***
***Comprehensive or Facilities-Only***

**Notes:**
Slide 11 - Decision #1 
Comprehensive or Facilities-Only

## 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**

***Covered Services of the Comprehensive Plan***

**Notes:**

Slide 12- Covered Services of the Comprehensive Plan

Covers care in all settings –
Home care (formal and informal)
Adult day care
Assisted living facilities
Nursing homes 

## 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. **

**Notes:**

Slide 13- The Home Care Benefit

Where Federal program really shines
Covers formal care as expected – nurses, home health aides, therapists (i.e. physical, speech)
Most people prefer to remain at home and from informal caregiver they know and trust.
This benefit allows you to compensate this person for their time and expense
Anyone who doesn’t normally live in your home
Family – 365 days
Friends, neighbors and other non-licensed caregivers – entire time benefits are paid and paid at same level as formal – UNIQUE benefit!
Informal caregiver can move in after benefit eligibility is certified

## Covered Services of the Facilities-Only Plan

***Covered Services of the Facilities-Only Plan***

-  **Nursing Home**
** ****Assisted Living Facility**
** ****Hospice Facility**
** ****Respite Services in a facility**

**Notes:**
Slide 14 - Covered Services of the Facilities-Only Plan

Nursing homes, assisted living facilities, hospice, respite in a facility

No home care.

About 30% less expensive than the Comprehensive plan. 

## 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**** **

**Notes:**
Slide 15- Decision #2 Daily Benefit Amount (DBA)

The highest amount your plan will pay for one day
$50 to $300 in $25 increments 
Won’t pay more than actual charge
HHC/ADC (Comprehensive plan) = 75% of DB
ALF/NH – 100% of DB
Consider average cost in your area and how much you could pay
LTCFEDS website or call 800 number for average local costs.

[Facilitator note:  At-home hospice care is not covered under the Facilities Only Option]

## Decision #3 

***Decision #3 ***
***Daily or Weekly Reimbursement***

**Page 16**

**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)**

**Notes:**
Slide 16 - Decision #3 Daily or Weekly Reimbursement

Comprehensive plan only
Benefits reimbursed on a daily or on a weekly basis (7 times your daily benefit) for greater flexibility.
If two people come to your home on the same day
Charges can be higher than your daily max
Weekly max can pay total charge
Premiums average 6% greater for weekly reimbursement 

-  **3 Years**
**• ****5 Years**
**• ****Unlimited**

* *

** **

** **

***Decision #3 ***
***Benefit Period***

***Decision #4***
***Benefit Period***

**Notes:**
Slide 17 - Decision #4 Benefit Period

Length of time your insurance coverage will last if you receive care every single day at a cost equal to or more than your daily benefit amount.  
Doesn’t mean how long you can be covered
Options are three years, five years and unlimited
Unlimited = benefits never run out – still have daily or weekly max
Unlimited 35% higher than 5 years

**DBA x Benefit Period (in days) = Maximum Lifetime Benefit**
_**Example**_**: **
**	****$100 DBA x 1,095 days (3 years x 365 days) = $109,500**

***The Unlimited Benefit Period has no Maximum Lifetime Benefit******.***

**Notes:**
Slide 18 - Calculating Your Maximum Lifetime Benefit

The Benefit Period choice is really a multiplier to determine Maximum Lifetime Benefit

Sometimes called “pool of money”

DB x # of days in benefit period = Maximum Lifetime Benefit 

[Read example quickly.]

Average caregiving time at home is 4.5 years and the average nursing home stay is about 2 1⁄2 years. 

Some people choose unlimited benefit period to avoid worry about benefits running out

That’s 3 years of private-pay choices you might not otherwise have

**-  90 days**
**or**
**-  30 days**
**Need to meet only once in your lifetime**

***Waiting Period***

** **

** **

***Myth #2 - The Facts***
***Who Pays for Long Term Care***

***Decision #5***
***Waiting Period***

**Notes:**
Slide 19 - Decision #5 Waiting Period

Number of days once you become eligible for benefits that you are willing to pay for care before insurance pays

Elimination period or deductible

30 days or 90 days

30-day averages 12% higher than 90-day vs. paying additional 60 days out-of-pocket at future costs

Counts actual dates of service but one time unlike homeowners/auto/health insurance

## Decision #6

***Decision #6***
***Inflation Protection Options***

**Automatic Compound Inflation Option (ACI) **
**or**
**Future Purchase Option (FPO)**

**Notes:**
Slide 20 - Decision #6 - Inflation Protection Options
Critical to have coverage as meaningful in the future as it is today
Federal Long Term Care Insurance Program - two inflation protection options

## Automatic Compound 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**

**Notes:**
Slide 21- Automatic Compound Inflation Option

Daily Benefit automatically increases 5% compounded every year
No corresponding increase in premium 
Increases continue while eligible for benefits
Premiums stop when benefits are payable and increases continue even though you are no longer paying premiums!

[Facilitator note: if asked, we plan to have a true-up mechanism in the event the 5% proves not to keep up with actual inflation]

## 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**

**Notes:**
Slide 22 - Future Purchase Option
Increases your Daily Benefit every two years as long as 
Not eligible for benefits and 
Don’t decline the increase
Offers stop after three declines – can request again only with evidence of good health 
Each time your coverage increases, premium for additional coverage will be based on your age and premium at the time the increase takes effect
Totally unique feature – with each offer, can switch to the Automatic Compound Inflation Option without proof of good health, as long as not eligible for benefits and have not declined three increases 

[Facilitator note: on average the following is the difference in rates for a plan with ACI versus a plan with FPO:]
Age 40	3.5 times as much
Age 50	3 times as much
Age 60	2.5 times as much
Age 70	2 times as much

## The Difference in the Options

**VS.**

**These charts are for illustrative purposes only.**

**Automatic Compound Inflation Option**

**Future Purchase Option (Assumes all benefit increases accepted)**

**Notes:**
Slide 29 - The Difference in the Options 

visual illustration of the difference between the two inflation options

FPO premium starts out significantly lower than ACI

as benefit increases FPO premium increases and eventually becomes greater than the ACI premium.  

FPO premium increases steeply during normal retirement ages

consider whether you will be able to afford the higher premium under the FPO as you get older 

[Facilitator note:  Red laser pointer works well to illustrate difference in pattern of premium increases between the two options.]

## The Choice Is Yours

***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**

**Notes:**
Slide 24 - The Choice is Yours

To help with decision making, OPM has developed four pre-packaged plans [do not read list]
All include
90-day waiting period
A daily benefit amount (rather than weekly)
Choice of either Automatic Compound Inflation Option or Future Purchase Option
The Benefit Period varies to help you find a plan that best meets your needs and budget.  
Can customize a plan
Let’s look at each one separately:

## Customize a Plan

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

**Notes:**
Slide 29 - Customize a Plan

Can customize a plan with any combination of benefits on slide

Premium calculator is available on the LTCFEDS web site (www.LTCFEDS.com) or by calling an 800 number I will give you shortly

## Additional Features

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

**Notes:**
Slide 30 - Additional Features

So many that add exceptional value:
Alternate plan of care provides flexibility to pay for services not specifically defined as covered services under this Program
Bed reservations pay to hold your bed up to 30 days per calendar year if you need to temporarily leave  - family visits or hospital stays, for example
Coverage for care outside the U.S. (few other plans do this)
No benefit exclusion if you become eligible based on a mental or nervous disorder (few other plans do this)
Caregiver Training: pays to help your primary caregiver take care of you better (lifting, nutrition, bathing, etc.) 

## 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                                                                                                                                                                                                                **

**Notes:**
Slide 31 - Care Coordinators Help You Every Step of the Way

Registered nurses help you --
Through the benefit qualification process
Help you identify long term care providers
Arrange for discounted services
Monitor the care you’re receiving
Assist with altering your plan of care as your needs change
UNIQUE FEATURE: the Federal program also provides care coordination services to qualified relatives
Reduce stress when a relative needs long term care 

## How to Qualify for Benefits

*	*

***How to Qualify for Benefits***

**You must need help to perform at least 2  activities 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**

**Notes:**
Slide 32 - How to Qualify for Benefits
You will be eligible for benefits when
A licensed health care practitione (doctor, registered nurse or licensed social worker) certifies and Long Term Care Partners agrees that, you are unable to perform at least two of six Activities of Daily Living (ADLs) 
Without substantial assistance for a period expected to last at least 90 days
(Activities of daily living: eating, toileting, bathing, transferring (from bed to chair), dressing and continence)
OR
Severe cognitive impairment that makes you a threat to self or others
AND you have a plan of care that is established by a licensed health care practitioner and approved by Long Term Care Partners

Facilitator note: if asked,  definition of ADLs is in the Benefit Booklet. 

**  **

**Page**
**33**

* *

**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**

**Notes:**
Slide 33 - What You Need to Know About Premiums

[Read slide]

Open Season is July 1 – December 31, 2002. 

## Sample Biweekly Premiums for Pre-Packaged Plans

**Page**
**34**

**Notes:**
Slide 34 - Sample Bi-Weekly Premiums for Pre-Packaged Plans – this slide for actives only

Sample rates, based on age, for the four pre-packaged plans
Vary based on age and benefit features
Example:  Premium for 55 with ACI is only $4.60 a day vs. a benefit of up to $4,500 a month immediately and will grow for the rest of your life
BUY YOUNG – pay longer but less as longer you wait, the greater benefit you’ll have to buy due to inflation
Can customize by...
Premium Calculator at www.LTCFEDS.com; or
By calling 1-800-LTCFEDS (1-800-582-3337)

## Guaranteed Renewable/Portable

**Coverage is portable**

***Guaranteed Renewable/Portable***

**Notes:**
Slide 35 - Guaranteed Renewable/Portable

Guaranteed renewable = can never be cancelled as long as you pay your premiums
Premiums have been set to remain constant for life, unless you increase benefits
Premiums can only be changed with OPM’s approval on a group, not an individual basis.
Portable = if later no longer a member of an eligible group, you can keep your coverage if you continue to pay the required premium and have not exhausted your maximum lifetime benefit

## 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 of       living employees**

**Notes:**
Slide 42 - Who is Eligible To Apply?

Most Federal and U.S. Postal Service employees = must be in a POSITION that conveys eligibility for the Federal Employees Health Benefits Program

Does not mean you must be enrolled in FEHB, just that you are eligible to enroll

In addition, members of the uniformed services

[Read rest of slide]

[Facilitator note: Employees of the Tennessee Valley Authority ARE eligible to apply, even though they may not be eligible for FEHB.  Employees and retirees of the D.C. government ARE NOT eligible to apply even if they are eligible for FEHB.  Also note that it’s the POSITION that conveys eligibility, so don’t say “if you are eligible for FEHB” – say “if you are in a POSITION that conveys eligibility for FEHB”]

## 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**

**Notes:**
Slide 38 - What Else Do You Need to Know?  

[Read slide]

No “self and family coverage” 

## Underwriting Requirements For Open Season

***Underwriting Requirements For Open Season***

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

**Notes:**
Slide 39 - Underwriting Requirements for Open Season
Underwriting = reviewing health status to determine whether you qualify for coverage
The great news...
OPM has made it possible for employees and their spouses to easily qualify
Seven simple medical questions (nine for spouses) AS LONG AS APPLY DURING OPEN SEASON
Additional questions for those requesting the Unlimited Benefit Period
Don’t know when other Open Seasons will be (not annual!)
NO GUARANTEE THAT ABBREVIATED UNDERWRITING WILL BE OFFERED AGAIN
Full underwriting for ...
Annuitants
Retired members of the Uniformed Services, and
Qualified relatives
Full underwriting means – 
Answering questions about your health
Authorizing access to your medical records
Maybe having an interview with a nurse.
Applications which include the underwriting questions are on the LTC Partners web site (www.LTCFEDS.com)
[Facilitator note:  re: physical exams:  There is no requirement to have a physical examination; however for those going through full underwriting, those who apply for the unlimited benefit period using the abbreviated underwriting form, and spouses who answer “yes” to questions 8 and/or 9 on Part B of the abbreviated underwriting form must authorize access to medical records and may have an interview with a nurse.  If recent medical records are not available, the applicant may be asked to have an examination with their physician at their expense.]

## 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**

**Notes:**
Slide 40 - What if I Don’t Pass Underwriting?
Good news - all members of the Federal Family are offered something
Two possibilities for those people who are declined:
The Service Package is available to all who are declined, and it’s mainly access to the care coordination services for $59 per year for a single or couple.
The Alternative Insurance Plan is a lower cost, reduced benefit plan that is available to some employees and members of the Uniformed Services and their spouses who are declined.   
[Facilitator Notes: The initial weekly benefit for the Alternative Insurance Plan is $200 and grows based on the number of months premiums are paid prior to becoming benefit eligible.  For example, after 24 months the $200 per week benefit would grow to $300 per week.] Annuitants and anyone else using the full underwriting application who is denied coverage will NOT be offered the Alternative Insurance Plan. The Service Package, but not the Alternative Insurance Plan will be offered to:
Those applicants who answered yes to any of questions 1-3 in Section B of the abbreviated underwriting form.
Those applicants who answered yes to any of questions 1-3 in Section B of the full underwriting form.
Please note that the features of the service package are included under the Insurance Program.  Qualified relatives of enrollees in the Insurance Program have access to these services even if they are not themselves enrolled, so they don’t need to buy the service package. The Alternative Insurance Plan and the Service Package will be available to those employees and spouses who answered “yes” to any of questions 4-7 in Part B and spouses who answered “yes” to questions 8 and 9 of the abbreviated form and were declined.  Not all spouses who answer “yes” to questions 8 or 9 will be declined. 

## Coverage Effective Date

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

**Notes:**
Slide 41 - Coverage Effective Date

[Read slide] 
[Facilitator note: Don’t read this, but if there is a question, you should know that in order for coverage to be effective, employees and members of uniformed services must be actively at work on their effective date.]
Actively at Work means that you meet all of the following conditions:
You are reporting for work at your usual place of employment or other location to which government business requires you to travel; and 
You are able to perform all the usual and customary duties of your employment on your regular work-schedule; and
You are not absent from work due to sickness, injury, annual leave, sick leave or any other leave (for employees working an alternative work schedule, an “AWS” day counts as a day you are Actively at Work);
For a Member of the uniformed services, that you are on active duty and are physically able to perform the duties of your position.

## Billing Options

-  **Payroll/annuity/pension deduction**
** ****Automatic bank withdrawal**
** ****Direct bill**

**Notes:**
Slide 42 - Billing Options
[Read slide]

Can use automatic deduction process to pay premiums for qualified relatives (e.g. adult children, parents) 

## 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**

**Notes:**
Slide 43 - Why the Federal Program? 

[Read slide]

[Facilitator note: This is the version for actives with abbreviated underwriting bullet]

## 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**

**Notes:**
Slide 44 - Why the Federal Program? 
And in addition there is ...
No exclusion from benefits for mental or nervous disorders
No war exclusion (benefit period can be shortened if necessary)
Right to an independent third party review for disputed claims
Premium stability with premiums designed to be constant for life
JH and MetLife have never raised their premiums for their                                                                                                                                                                                                       employer-sponsored group LTCI plans (long history of rate                                                                                                                                                                                                      stability)  
OPM will make sure that the Program evolves over time.  For                                                                                                                                                                                                      example, OPM will make sure it covers robotic care if that                                                                                                                                                                                                     becomes the primary method of providing care