Congressman calls for hearings about federal LTC insurance premium hikes

Federal News Radio has been telling you about the premium hikes regarding the federal Long Term Care insurance program.

Now, a Virginia Congressman says he wants hearings held on the Hill to determine whether or not participants were misled.

Gerry Connolly (D-Va.) said he has written to Congressman Stephen Lynch (D-Mass.), chairman of the Subcommittee on Federal Workforce, Postal Service and the District of Columbia, in the hopes of getting some answers.

"I believe he's favorably disposed to that request. We're in discussion with the Office of Personnel Management, but I really feel that it's only fair to those who, in good faith, signed up for this program seven years ago that there be a full hearing of what went wrong and why, because otherwise I think, frankly, those federal workers could rightfully accuse the federal government of bait-and-switch -- of operating in bad faith."

The reason for the increase has to do with the old contract expiring and a new one taking its place.

"It was a contract that was up for renewal. There were, initially, in 2002, there were two companies -- Metropolitan Life and John Hancock -- who bid for, and got, the business. Metropolitan Life has decided not to participate in round two and John Hancock is going to [keep] the contract. That doesn't excuse the fact that 133,000 of the 144,000 who signed up for the high end option are going to experience a 25 percent increase in their premiums for this coverage, when they were pretty much promised seven years ago that if they went with a high end and paid a little extra for that, they would not have their premiums increase."

Connolly said this is not happening because, in his opinion, the insurance company and the federal government got it wrong from an actuarial point of view.

He said, during the hearings, he wants to know why this happened.

"You still have to be accountable. Tell us all about it. How did it go wrong? I think we have to have hearings to better understand what happened, why it happened and how can we make sure it doesn't recur. . . . In a perfect world, we would say -- "hey, a deal's a deal," and we're going to keep that contract. I think the Office of Personnel Management might have a slightly different point of view about that. I understand that there may be reasonable explanations for -- frankly, with the best of intentions, they just got it wrong from an actuarial point of view and a new program. But, I still think that you have to operate in good faith and you owe a much better communication to those who are affected."

In addition to looking at this issue, the Congressman is holding an open season event for all federal employees and retirees. It will take place at the Fairfax County Government Center on Nov. 30. Experts and representatives of various health care programs will be on-hand to answer any questions.

For information about similar events from Rep. Chris Van Hollen (D-Md.) in Montgomery County, click here.

For more Pay & Benefits news, check out Mike Causey's Federal Report and sign up for Mike's daily e-mail.

For more about open season options, don't miss For Your Benefit, Monday at 10 a.m.