# Presentation: 342119

## Long Term Care Insurancefor theFederal Family 

**Strategic Compensation Conference 2001**
**Frank D. Titus, Assistant Director**
**for Long Term Care**

## 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

## -Employees and the Uniformed Services
-Retirees, civilian & uniformed services
-Parents and parents-in-law
-Adult Children and foster children
-Spouses of the above
-Unmarried former spouses
-Unmarried brothers & sisters

- -Retirees, civilian & uniformed services
- -Parents and parents-in-law
- -Adult Children and foster children
- -Spouses of the above
- -Unmarried former spouses
- -Unmarried brothers & sisters

**Groups Eligible to Apply for Coverage **

## 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......

## Weekly Benefit: 
 Between $400 and $2,000
	  (in $50 increments)
Length of Policy:                 
 3 years, or
 5 years, or 
 Lifetime (most expensive)

-  Between $400 and $2,000
- 	  (in $50 increments)
- _Length of Policy_: _                _
-  3 years, or
-  5 years, or
-  Lifetime (most expensive)

**You Choose:**

## 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

- 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) 

- Pool gone = end of insurance
- Lifetime coverage has endless pool (and costs the most)

**Pool of Money**

## 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

- Standard policy = 90 days
- Option for shorter such as 30 days
- Not calendar days; days of care
- Shorter = more expensive

**Waiting Period**

## 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.

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

	Based on: 
the type of care
		              and 
use of care coordination

- 	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) 

- 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

- 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 DON’T use the care coordination program

- Home care
- Home health care
- Adult day care
- 	IF you DON’T use the care coordination program

**Benefit Levels**

## 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

- Obtain provider discounts
- Know about quality and range of available services
- Be available to parents of insured employees who need help

**Care Coordination Program**

##   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

- 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

**Trained Care Coordinator**

## 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

## 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) 

- 	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

**When Benefits Start**

## Bathing		- Eating
Toileting		- Transferring
Dressing		- Continence
Standby assistance
          OR
Severe Cognitive
   Impairment

- Toileting		- Transferring
- Dressing		- Continence
- Standby assistance
-           OR
- Severe Cognitive
-    Impairment

**Activities of Daily Living**

## 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

- 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

**Tax Treatment**

## 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 Alzheimer’s disease, dementia, organic brain syndrome, multiple sclerosis, muscular dystrophy, ALS, or Parkinson’s 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

- Spousal discounts
- Downgrades

## Other Program Features:OPM on Your Side

-  Employer-sponsored
-  Important to Govt’s 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 carrier’s decision on a claim

## Open Season

- Don’t 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
- We’ll 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 can’t 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/ltc**** ****ltc****@****opm.gov  **(for email)

## LTCInfo Email Listserv

- Read BAL 01-903           dated May 15
- Subscribe _even if_ you’ve already subscribed to the BENEFITSINFO listserv

## Our Next Steps

- Aug/Sep	- Evaluate proposals
- Oct 2001	- Award contract
- Then		- Education, 						   marketing, etc.
**Coverage begins NLT  **
**October 2002**

## Questions?