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Workers to Have Say on Higher Health Premiums

Ed O'Keefe | The Washington Post via YellowBrix

October 14, 2009

Current and former federal employees angered by premium increases in the Federal Long Term Care Insurance Program will get their day before Congress on Wednesday, when senators hope to get answers about why the impending price jump is warranted and what the government did to inform participants.

Most federal and postal employees are eligible for the program, which is run by the John Hancock insurance company and counts about 225,000 members. About 150,000 of them are facing rate increases of between 5 and 25 percent in January.

<a href=“”This column first reported on those increases in August, when former Government Accountability Office employee Chester Joy, and his wife, Donna, discussed the 25 percent jump in premiums they are facing. About 42,200 other enrollees living in Virginia, Maryland and the District also will be hit with the maximum increase.

Marketing materials approved by the Office of Personnel Management led the Joys to believe that their premiums would not rise if they joined the program. In the months since they learned otherwise, they have been weighing their options, but are especially angry with OPM.

“This is exactly the opposite of the OPM I used to know,” Chester Joy said in an interview.

Joy will testify Wednesday before a joint hearing of the Senate Special Committee on Aging and the Senate subcommittee on oversight of government management, the federal workforce, and the District of Columbia.

According to his prepared testimony, he will tell lawmakers that the marketing materials did not clearly state the possibility of a rate increase to enrollees who selected the Automatic Compound Inflation Option, or ACI. The option allows enrollees to pay more at a younger age and is designed to keep pace with annual inflation. A brochure that Joy plans to submit for the record mentions only possible premium increases in a section that describes a different payment plan.

“We thought we were buying some insurance of quality,” Joy said ahead of the hearing. “Maybe [OPM] got caught in the transition, I don’t know. But if we do continue with this program, we’re going to be relying on OPM’s professional oversight.”

Lawmakers want answers to Joy’s concerns and appear ready to keep closer tabs on the program.

According to his prepared remarks, Sen. Daniel K. Akaka (D-Hawaii), chairman of the subcommittee, is expected to say that the long-term care program “should serve as a model for the private sector and state and local governments. Right now, the program is falling short of this goal.”

“Red flags have been raised concerning OPM’s role as a regulator of this insurance program,” according to Sen. Herb Kohl (D-Wis.), chairman of the Aging Committee. “We hope to hear that OPM has a plan for avoiding outrageous rate hikes in the future, and for providing better consumer education to its policyholders.”

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