[Congressional Record (Bound Edition), Volume 145 (1999), Part 1]
[Extensions of Remarks]
[Pages 326-327]
[From the U.S. Government Publishing Office, www.gpo.gov]



      FEDERAL EMPLOYEES GROUP LONG-TERM CARE INSURANCE ACT OF 1999

                                 ______
                                 

                        HON. ELIJAH E. CUMMINGS

                              of maryland

                    in the house of representatives

                       Wednesday, January 6, 1999

  Mr. CUMMINGS. Mr. Speaker, on behalf of the President of the United 
States, William Jefferson Clinton, I am pleased to introduce this 
important legislation that will provide long-

[[Page 327]]

term care insurance to federal employees. Long-term care refers to a 
broad range of health, social, and environmental support services and 
assistance provided by paid and unpaid caregivers in institutional, 
home, and community settings to persons who are limited in their 
ability to function independently on a daily basis. The need for long-
term care insurance is evidence as the population ages and older 
Americans need assistance for their daily living.
  The number of Americans over 65 will leap from 34 million in 1995 to 
60 million by 2025. Americans will find it impossible to afford nursing 
home care which will increase from $40,000 today to $97,000 by 2030. 
Under current law, a family would have to deplete all their financial 
resources to qualify for medicaid which would only pay for a portion of 
needed long-term care services. By offering long-term care as a benefit 
option for its employees, the federal government, as the nation's 
largest employer, can set the example for other employers whose 
workforce will be facing the same long-term care needs.
  The ``Federal Employees Group Long-Term Care Insurance Act of 1999'' 
would authorize the Office of Personnel Management (OPM) to purchase a 
policy or policies from one or more qualified private-sector 
contractors to make long-term care insurance available to federal 
employees and retirees, and family members whom OPM defines as 
eligible, at group rates. Coverage would be paid for entirely by those 
who elect it.
  OPM will select a single or a very small number of carriers based on 
quality, service and price to offer a high-quality benefits package to 
eligible participants. This benefits package would be consistent with 
the most recent National Association of Insurance Commissioners 
standards. OPM will be open to various financing arrangements proposed 
by the carrier(s), such as the use of consortia or reinsurance 
arrangements to ensure the financial stability of the program. OPM 
would have broad flexibility to determine appropriate benefits and to 
contract competitively for benefits with one or more private carriers, 
without regard to section 5 of title 41, United States Code, or any law 
requiring competitive bidding. OPM needs the flexibility to capitalize 
on complex market factors to procure the best value for federal 
enrollees. OPM will ensure that resulting contracts are awarded on the 
basis of contractor qualifications, price, and reasonable competition 
to the maximum extent practicable. Qualified carriers shall: (a) be 
licensed to do business in all States and the District of Columbia to 
offer long-term care insurance; (b) agree to provide coverage for all 
eligible enrollees consistent with requirements for qualified long-term 
care insurance contracts and issuers enacted under subtitle C of Title 
III of the HIPAA; (c) propose rates which in OPM's judgment reasonably 
reflect the cost of benefits provided; (d) maintain funds associated 
with the federal employees contract separate and apart from the 
carriers' other funds; and (e) agree to all risk.

  The contract or contracts would be for a duration of 5 years, unless 
terminated by OPM. OPM will issue regulations to provide for 
opportunities to enroll and benefit portability. With this statutory 
and regulatory authority, OPM will have the flexibility needed to 
administer the program as the market for long-term care services and 
protection evolves over time.
  The program would be available to federal employees and retirees, and 
other spouses; a former spouse who is entitled to annuity under a 
federal retirement system; parents, and parents-in-law. All 
participants other than active employees would be fully underwritten as 
is standard practice with products of this kind. Coverage made 
available to individuals would be guaranteed renewable and could not be 
canceled except for nonpayment of premium. Though each participant 
would be responsible for paying the full amount of premiums, based on 
age at time of enrollment, group rates will save an estimated 15-20 
percent off the cost of individual long-term care policies.
  OPM will be responsible for the administrative costs of the program, 
which is estimated to be $15 million over a 5-year period. Initial year 
costs include developing and implementing a program to educate 
employees about long-term care insurance, procuring a contract or 
contracts, and validating the reasonableness of rate proposals. 
Employee and annuitant premiums would be withheld from salary or 
annuity and transmitted directly to respective contractors, and those 
enrollees could also elect withholdings for coverage of their spouses.
  Any eligible enrollees shall, at the discretion of OPM, submit 
premiums directly to the appropriate contractor. As with the Federal 
Employees Health Benefits Program, the bill would require participating 
contractors to provide benefits when OPM finds the individual is 
entitled to benefits under the terms of the contract. Participating 
carriers would be required to reimburse OPM's expenses for adjudicating 
claims disputes.
  The proposal would provide a substantial benefit to federal employees 
and retirees by providing access to quality long-term care insurance 
products at cost savings, group premiums. I urge members to support 
this important legislation.

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