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OPM to Offer Peek at Insurance Proposal for Long-Term Care |
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Tomorrow, the Office of Personnel Management gives federal employees, members of the armed forces and retirees their first chance to look at its plans for providing long-term care insurance. OPM will post a "proposed product design" containing definitions, benefit options and program features on its Internet site, www.opm.gov/ insure/ltc, after the start of the business day tomorrow. The proposal represents the first step in setting up the program, which is scheduled to begin providing coverage in October 2002. The insurance, which will be offered to as many as 20 million Americans, seems likely to develop into one of the largest benefit programs created for employees and retirees in decades. The program, approved by Congress last year, will offer numerous government workers a way to meet essential long-term care needs and, perhaps, avoid depleting their assets. Long-term care insurance helps pay for nursing and custodial assistance for people with chronic illnesses or disabilities that limit their ability to carry out daily tasks, such as getting in and out of bed, eating and bathing. Tomorrow's release of information starts a months-long effort by OPM to educate employees and retirees about the benefits and costs of the insurance. Employees and retirees will be asked to think about what type of care they will need, where they expect to receive their care (at home, assisted living facility, elder care center or nursing home) and how much of that care they can pay for on their own and how much should be covered by insurance. OPM officials hope to design a flexible program that will allow employees and retirees to meet their needs, Frank D. Titus, OPM's assistant director for long-term care, said at a briefing Friday. He cautioned that components of the program may change during the year as OPM obtains feedback from employee and retiree groups and the insurance industry. On its Web site, OPM will provide information about what kinds of medical information the program will seek from applicants, the program's tax advantages and criteria for receiving benefits. Retirees, for example, will find the proposed program requires them to submit more information about their health, medications and treatments than it requests from active-duty employees and their spouses. As proposed, the program will permit the choice of a weekly benefit, from $400 a week up to $2,000 a week, in $50 increments. Enrollees also will choose the length of the policy they want, such as a three-year term, a five-year term or lifetime coverage. The maximum weekly benefit and the length of the policy will create what Titus called a "pool of money," and the program will pay benefits until the money is exhausted. For example, he said, a person selecting a weekly benefit of $700 and a three-year policy would build a fund worth $109,200. Because the money could be consumed at different rates, depending on the type of care, some people will find that their money outlasts their policy term, he said. Titus suggested that the program would encourage employees to choose "compound inflation protection" that will automatically increase weekly benefits by a specified percentage, probably 5 percent, every year. Participants will pay the full cost of premiums. They will be based on age -- the younger you are when you enroll, the lower the cost -- and on coverage choices -- the higher the benefit or the longer the policy, the higher the premiums. The cost of premiums, of course, will likely influence how many government workers and retirees take advantage of the long-term care program. A sampling of individual policies with three years of benefits showed that, on average, a 45-year-old could expect to pay about $70 a month, a person at 55 might pay almost $90 monthly, and a 65-year-old might pay $165 per month. Titus said estimates of premium costs for the government program would not be available until later this year, when OPM selects one or more companies to provide coverage. OPM, he said, "is looking for the best product at the most competitive price." No Federal Diary I'll be away on spring break this week. The column will resume next Sunday. Stephen Barr's e-mail address is barrs@washpost.com. © 2001 The Washington Post Company |
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