Are the LTC shoes starting to drop?

The Office of Personnel Management announced last week that premium rates for the Federal Long Term Care Insurance Program will increase by an average 83% effective November 1.   John Hancock is the present insurer, and was the only bidder for the new contract beginning November 1.   

Officials representing Federal Employees expressed shock and anger at the news.  The anger is understandable - the shock is much less understandable.  There has been plenty of information about national, rapid increases to LTC costs. And specific to the federal LTC program, last August OPM made a sudden, unprecedented decision to levy substantial premium increases for new enrollees.  It was then unmistakable – or should have been unmistakable – that the federal LTC house was on fire.  However, the officials who are shocked today, seem not to have thought it important enough last August to prepare their constituents.   As this most recent news confirms – the LTC house is still on fire.

Where the Federal program goes from here is anyone’s guess. In fact, where LTC Insurance in general goes from here is anyone’s guess.  The principle remains that the reason to buy LTC insurance is to insure one's assets. The point at which that is a break-even or better risk-management decision appears to be going up.