Long-Term Care Insurance: Federal Program Compared Favorably with Other Products, and Analysis of Claims Trend Could Inform Future Decisions
GAO-06-401
Published: Mar 31, 2006. Publicly Released: Mar 31, 2006.
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Highlights
The Long-Term Care Security Act required the federal government to offer long-term care insurance to its employees, their families, and others. The act also required GAO to conduct a study of the competitiveness of the Federal Long Term Care Insurance Program, which began in 2002, compared with individual and group products generally available in the private market. GAO compared the federal program's benefits, premiums, enrollment rates, and enrollee characteristics with other products over a 3-year period. GAO also compared the federal program's early claims experience with initial expectations.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Personnel Management | The Director of OPM should analyze the reasons for the lower-than-expected early claims experience and, as appropriate, use the results of this analysis to modify assumptions about the expected claims experience. |
Closed – Implemented
OPM analyzed the reasons for the lower than expected early claims experience and projected premiums and notified Congress in a June 2007 correspondence that claims represented a small portion of the program's expected liabilities. In October 2009, OPM testified before Congress that premium increases would be necessary as of January 2010 due to differences in the program's actual and anticipated experience since the program's inception. Providing Congress with important information affecting potential premium changes was consistent with the intent of our recommendation.
|
| Office of Personnel Management | The Director of OPM should analyze the projections for the amount of premiums to be collected to pay for claims, including an analysis of the assumptions made for the projections that are related to future claims experience and other factors affecting premiums. OPM should report both analyses to Congress prior to the next contract negotiations. |
Closed – Implemented
OPM analyzed the reasons for the lower than expected early claims experience and projected premiums and notified Congress in a June 2007 correspondence that claims represented a small portion of the program's expected liabilities. In October 2009, OPM testified before Congress that premium increases would be necessary as of January 2010 due to differences in the program's actual and anticipated experience since the program's inception. Providing Congress with important information affecting potential premium changes was consistent with the intent of our recommendation.
|
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Topics
Comparative analysisCompetitionFederal employeesInsurance premiumsLong-term careLong-term care insurancePrivate sectorProjectionsInsurance claimsInflation