Compare federal long-term care insurance programs to find lower-cost options

Open enrollment for the Federal Long-Term Care Insurance Program, the largest group long-term care insurance plan in the United States, begins April 4 and continues through June 24 (2011).

This is the first abbreviated enrollment opportunity for unenrolled applicants since 2002. The federal program currently has more than 200,000 participants and is available to millions of federal employees, postal workers, active military, as well as spouses and, for the first time, many of the same -sexual partners. During the open enrollment period, applicants will answer fewer health questions to be eligible for the program.

Initially, two insurers (John Hancock and MetLife) offered insurance protection by establishing Long Term Care Partners, LLC, a new company dedicated to administering the FLTCIP. In May 2009, the Office of Personnel Management (OPM) selected John Hancock as the sole underwriter for the second term of the FLTCIP’s seven-year contract.

It is important that consumers who are eligible for the program understand that this is a “group” plan that uses nine simplified health underwriting questions. Informed financial experts explain that this is an important opportunity for those who already have some health problems and may not qualify for private LTC insurance.

However, financial planners explain that the federal program does not offer discounted rates for good health. These usually reduce the coverage of a country and are blocked. Simply put, they are not lost when the policyholder’s health changes in future years. The federal plan also doesn’t offer discounts for spouses or partners that can add up to 40 percent in annual savings for each person.

As a result, healthy couples can generally get significantly more coverage for less money and should compare the federal program with private long-term care insurance plans available from major insurance companies, including John Hancock, Genworth , Prudential, Mutual of Omaha, LifeSecure, and MedAmerica.

The chart below compares Federal Plan costs to the 2011 LTC Insurance Price Index compiled by the American Long-Term Care Insurance Association. The industry trade organization collects rates from the leading and most highly rated insurers.

Federal Plans:
Single person (55 years old): $1,398.12 per year
Husband/Wife (both age 55) $2,796.24 per year
Benefit costs of $150 per day, 3-year benefit period, compounded inflation of 4%.

LTC Insurance Company A:
Single person (55 years old): $1,325.00 per year
Husband/Wife (both age 55) $2,084.00 per year
$150 per day benefit costs, 3 year benefit period, 3% compounded inflation, includes Preferred Health discount.
For Couple: Includes Shared Care Benefits Clause + Spousal Discount for Couple

LTC B Insurance Company:
Single person (55 years old): $1,435.00 per year
Husband/Wife (both age 55) $2,162.00 per year
Benefit costs of $150 per day, 3 year benefit period, 3% compounded inflation includes Preferred Health discount.
For Couple: Includes Shared Care Benefits Clause + Spousal Discount for Couple.