U.S. Military (Ret.): Retirees face long-term care premium hike - Military Retirement - Navy Times

U.S. Military (Ret.): Retirees face long-term care premium hike

The government has been telling us that living costs are falling, so military retirees will not get a cost-of-living adjustment this year.

But retirees younger than 65 who are participating in the Federal Long Term Care Insurance Program got a rude shock when the Office of Personnel Management sent out notices that premiums for that program will shoot up 25 percent effective Jan. 1.

Retirees 66 to 69 will see smaller increases, and those 70 and older will see no increases.

OPM said a new contract was awarded Oct. 1 and the program is getting an upgrade, with Version 2.0 supposedly providing more benefits. But that hike in premiums has many retirees stirred up.

“What I would like to know is how the government is not increasing our COLA but turning around and increasing our FLTCIP by 25 percent,” retired Marine Robert Monical wrote to me.

Monical said he and his wife got FLTCIP “so that when we get old we would not be a burden on the government and the taxpayers. We sat down and figured a budget to include FLTCIP.”

But no COLA, coupled with a 25 percent increase in premiums, has left Monical unsure “if it will be feasible for my wife and me to keep this insurance.”

OPM’s explanation is that certain assumptions were used when the original premiums were set that are no longer sufficient, including the long-term return on program investments and factors such as persistency (the number of people who enroll and continue to remain insured).

To be fair, this is the first increase in premiums since the program began seven years ago. The rising costs of the program, coupled with improvements in the benefit, are driving the increases.

The issue here is not so much that the premiums need to be increased, but that they need to be increased by 25 percent at once.

This is the same problem we’ve had with Tricare premiums and deductibles in recent years. The Pentagon didn’t raise beneficiary costs for more than a decade, even as its own program costs spiraled upward. Then it tried to push big cost increases onto beneficiaries all at once, a move Congress has consistently rejected.

The cost of everything inevitably rises over time. But that’s the key — over time. There’s a difference between asking people to accept small, incremental increases in insurance premiums and socking them for 25 percent in one shot.

More information on the changes is online at www.ltcfeds.com/help/faq/second-contract.html.

Retired Command Master Chief Alex Keenan served 28 years in the Coast Guard. E-mail him at retired@atpco.com.