The Government Accounting Office (GAO) has released the first review of the Federal Long Term Care Insurance Program (FLTCIP).
GAO has found through the study that out of 66% enrolees 46% preferred a rate increase instead of reduced benefits while 1.6% chose coverage lapse rather than pay increased premium.
GAO interviewed officials from six carriers who in 2009 insured over 60% of all long-term care insurance policyholders as well as officials from OPM and John Hancock and reviewed program documentation, including FLTCIP contracts.
The study describes factors affecting carriers’ interest in FLTCIP, changes in the actuarial assumptions used to set FLTCIP premiums and the way Office of Personnel Management (OPM) manages actuarial assumptions, experience and program communications.
The study found that FLTCIP attracted carriers who were interested in growing their market share while carriers favouring a slower growth rate were less interested in providing coverage through FLTCIP.