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INTRODUCTION
A. INTRODUCTION. In
October 2002, a long-term care insurance plan will be available for federal
employees, annuitants, and the military. The group plan will provide insurance
coverage for the types of care needed when individuals are no longer able to
perform the basic functions of daily living.
1. Long-Term Care
Security Act. The Long-Term Care Security Act was signed into law on
September 19, 2000 to provide the federal family with an employer-sponsored
Long-Term Care (LTC) Insurance Program that will be a part of the government’s
overall compensation package. The Office of Personnel Management (OPM) drafted
a proposed product design for an LTC program and submitted requests for
proposals in June. During the summer, OPM received quality proposals from the
insurance industry and expects to award a contract by October of 2001.
2. Eligibility.
Those in the federal family who will be eligible to participate in the program
will include current federal employees; federal annuitants who retired on an
immediate annuity; survivor annuitants; individuals receiving compensation from
the Department of Labor; members of the uniformed services; military retirees;
military reservists at the time they qualify for an annuity; spouses and adult
children (at least 18 years old, including adopted children and stepchildren) of
employees and annuitants; and parents, stepparents, and parents-in-law of
current employees and active duty uniformed service personnel.
OPM has the authority and
may issue regulations to cover these other relatives: parents, parents-in-law,
and stepparents of annuitants; unmarried former spouses of employees and
annuitants who are receiving or are entitled to receive a portion of the
employee/annuitant immediate annuity; adult foster children of employees and
annuitants; and unmarried brothers and sisters of employees and annuitants.
3. Type of Coverage.
The LTC program will provide coverage for several types of LTC that enrollees
may need when they are no longer able to care for themselves—nursing home care,
assisted living facility care, formal and informal care in the home, hospice
care, and respite care. Keep in mind that LTC is not just for senior
citizens—40 percent of people receiving LTC are under age 65. LTC is often
needed at an early age because of incapacitation due to an accident, a stroke, a
brain tumor, multiple sclerosis, Parkinson’s disease, etc.
4. When Coverage
Will Begin. Following the awarding of a contract in mid-October 2001,
OPM will work with the contractor to develop educational and enrollment
materials to help potential enrollees in making decisions. OPM will also work
with the Department of Defense and other agencies to develop an implementation
plan and prepare for an open enrollment period (open season). After the open
season, LTC coverage will be offered to all who are eligible in October 2002.
Although the government will make no contribution toward premiums, OPM expects
the possible coverage of 20 million people to keep premiums 15 to 20 percent
lower than those available in the open market (see section E).
5. Medicare/Medicaid
and LTC. Medicare, the federal health insurance program for people 65
or older, will cover the first 100 days of care in a nursing home only if the
patient requires skilled care and has had a hospital stay of at least three days
immediately prior to entering the nursing home. The patient is responsible for
some deductibles and copayments. Medicare also covers limited home visits for
skilled care. Because of the following facts about Medicare coverage of LTC, it
is best not to count on Medicare to cover probable LTC needs:
(a)
Most LTC is not skilled care.
(b) Most LTC does
not take place in a nursing home.
(c) Most nursing
home stays do not immediately follow a hospital stay.
(d) Patients usually
require more or different home care than Medicare provides.
(e) Most people are
not covered by Medicare until age 65.
Medicaid, the program that
provides services to the poor and impoverished, might cover LTC services if a
patient meets the state’s poverty criteria. Usually a person must spend all
except $2,000 of assets and savings (except for house and car) to qualify. Care
is also restricted to a limited number of state-approved caregivers that are
willing to accept Medicaid payments. Because most people are reluctant to
dispose of all of their assets in order to qualify, Medicaid cannot be depended
on for LTC coverage.
6. Continuing Care Retirement Communities. Because LTC coverage may prove
to be very expensive for many NARFE members due to age, and because many may
also find it difficult to pass the underwriting qualifications because of
preexisting conditions, some members may want to consider a Continuing Care
Retirement Community (CCRS) as an alternative to enrolling in the LTC program.
CCRSs offer various
housing options and services on the same grounds. Facilities are available for
older people who are still active as well as for those with physical and mental
disabilities. Residents can move from one type of housing choice (independent
living apartment, cottage, or single-family home) to another (assisted-living
apartment with kitchen or furnished one-room unit with nursing care) as needed.
CCRSs are also expensive, but are usually a once-in-a-lifetime choice that offer
residents a lifetime of shelter and care.
More information on CCRSs is available at any of the
following: U.S. Department of Health and Human Services
(http://aspe.os.dhhs.gov/daltcp/Reports/ccrcrpt.htm); Better Business
Bureau (http://www.bbb.org/library/assisted060299.asp);
Continuing Care Accreditation Commission (www.ccaconline.org/aflist.htm);
American Association of Homes and Services for the Aging (www.aahsa.org/public/consumer.htm).
Members who do not have access to a computer should ask their Service Officer or
any chapter officer to print this material for them or they can have it printed
for them at any library.
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