AFSCME International's statement on long term care insurance rate hike

Statement for the Record

The American Federation of State, County and Municipal Employees (AFSCME)submits the following statement for the hearing record.

 AFSCME is a labor organization that represents over 1.6 million workers, including federal employees at the Library of Congress, the Department of Justice, the Department of Agriculture, the Federal Aviation Administration, the Peace Corps, the Corporation for National and Community Service, the U.S. Commission on Civil Rights, the Voice of America and the Architect of the Capitol.

Many AFSCME members are part of the estimated 215,000 federal employees that purchased a Long-Term Care Policy from Long Term Care Partners (LTC Partners), a joint venture of John Hancock and Met Life, with an informed understanding that their rates and benefits would remain constant. This understanding was based on the receipt and review of brochures and policy booklets provided by LTC Partners at the time of sale and in some cases information briefings held by their respective Human Resources Departments. The brochures, policy booklets, and briefings did not describe the plan's premium rates as effective for only seven years or indicate that at the end of the seven-year term the premium rates would be reevaluated.

The Library of Congress Professional Guild, AFSCME Local 2910, represents over 1,600 employees at the Library of Congress (LC). When employees of the Library learned of the premium increase, they contacted the LC Human Resources Department. The immediate response from the Benefits Coordinator was that the rates for the plan were fixed and no rate increase would take place. The Human Resources Department later contacted the Office of Personnel Management and was told that the rates would not increase. Individual employees, however, received contradicting responses when they contacted LTC Partners directly.

AFSCME appreciates the Special Committee on Aging and the Committee on Homeland Security and Government Affairs Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia joint investigation into this matter.

Our members are very upset. When they purchased Long-Term Care Policies years ago, they were not told nor given information, even with the smallest of fine print, which said the rates and benefits were subject to reevaluation. Simply put, LTC Partners withheld key information about the plan at the time of sale. To allow LTC Partners to change the rates and or benefits of their Long-Term Care Policies after hundreds of thousands of federal employees purchased a plan they reasonably perceived to remain constant and paid for throughout the years is unacceptable.

AFSCME requests the immediate postponement of the implementation of the rate increase. Furthermore, we ask that all federal employees who purchased the plan without knowledge of the rate's limited term of effectiveness be exempt from any future rate increases.