WASHINGTON, D.C. – U.S. Susan Collins, R-Maine, today applauded the decision by the Office of Personnel Management (OPM) to extend the deadline for federal employees who are facing staggering increases in premiums for a long-term health insurance program.
The decision to extend the deadline to Feb. 15, 2010, comes a week after a joint hearing on the issue by the Senate Special Committee on Aging, and the Subcommittee on Oversight of the Government Management, the Federal Workforce and the District of Columbia , on both of which Senator Collins is a member.
At the hearing, Senator Collins said she was alarmed to learn that, despite earlier assurances by OPM, more than 147,000 federal long-term care insurance enrollees would face soaring premium increases, some as high as 25 percent, in January.
The enrollees chose a program that promised no increases in exchanges for higher enrollee payments up front. That promise has been broken, she said.
As one of the original sponsors of the legislation that created the program, Senator Collins said the premium hike and short deadline were “simply unacceptable, particularly given the fact that OPM began to recognize the real possibility of increases as early as 2003. Yet, the agency gave little warning to federal workers and retirees that there would be an increase,” she said.
“To be aware of this possibility, plan participants would have had to search the fine print in their policy documents. There was no straightforward disclosure. To the contrary, the implication was that by signing up at a relatively early age and by paying a higher rate, one could avoid premium increases. It is disappointing that OPM did not make an effort to educate participants,” Collins added.
In a letter released late Wednesday, OPM director John Berry said the agency examined the issues raised at the hearing, chaired by Sen. Herb Kohl of the Special Committee on Aging.
Now, instead of facing a fast-approaching Dec. 14 deadline to make benefit option decisions, federal employees enrolled in the program now have until Feb. 15, 2010.
The quick deadline was concerning to Senator Collins and to other senators because the program had enacted higher premiums, changing a core commitment of its long-term program. Director Berry also said that the committee hearing led his department to re-evaluate the issue.
“We understand and share your concerns and would not have agreed to an increase unless we believed it was a necessary step for the stability of the program,” Berry’s letter said. “That said, we intend to conduct an overall evaluation of this program to determine if there are ways in which it can be more effectively and efficiently administered in the future.
“The new educational and promotional materials for the program, introduced October 1 of this year, clearly emphasize premiums are not guaranteed. We will continue to look for ways to improve transparency in our materials,” the letter concluded.