Long-Term Care Insurance: Federal Program Has a Unique Profit
Structure and Faced a Significant Marketing Challenge (29-DEC-06,
GAO-07-202).
Spending on long-term care services--about $193 billion in
2004--is expected to rise. In 2000, Congress passed the Long-Term
Care Security Act, requiring the federal government to offer
long-term care insurance. To do so, the Office of Personnel
Management (OPM) contracted with Long Term Care Partners LLC
(Partners) to create the Federal Long Term Care Insurance
Program. This is the second of two reports required by the act on
the competitiveness of the federal program. GAO's March 31, 2006,
report, Long-Term Care Insurance: Federal Program Compared
Favorably with Other Products, and Analysis of Claims Trend Could
Inform Future Decisions (GAO-06-401), found that the federal
program's benefits and premiums compared favorably with other
plans, but enrollment and claims experience--the amount and
number of claims payments--were lower than Partners expected. In
this report, GAO compared the federal program's profit structure
and marketing efforts with those of other plans and updated its
analysis of the program's claims experience. GAO reviewed the
contract between OPM and Partners and interviewed OPM, Partners,
and insurance carrier officials, as well as actuaries and
industry experts. GAO also analyzed data on claim payments for
the federal program since it began in 2002.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-202
ACCNO: A64507
TITLE: Long-Term Care Insurance: Federal Program Has a Unique
Profit Structure and Faced a Significant Marketing Challenge
DATE: 12/29/2006
SUBJECT: Claims settlement
Comparative analysis
Elderly persons
Insurance
Insurance claims
Long-term care
Long-term care insurance
Marketing
Performance measures
Program evaluation
Program management
Insurance benefits
Federal Long Term Care Insurance Program
******************************************************************
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GAO-07-202
* [1]Results in Brief
* [2]Background
* [3]Long-Term Care Insurance
* [4]Long-Term Care Insurance Marketplace
* [5]Federal Long Term Care Insurance Program
* [6]Federal Program Has a Unique Profit Structure
* [7]Federal Program Used Marketing Efforts Generally Similar to
* [8]Claims Experience in the Federal Program Increased but Remai
* [9]Concluding Observations
* [10]Agency Comments
* [11]GAO Contact
* [12]Acknowledgments
* [13]GAO's Mission
* [14]Obtaining Copies of GAO Reports and Testimony
* [15]Order by Mail or Phone
* [16]To Report Fraud, Waste, and Abuse in Federal Programs
* [17]Congressional Relations
* [18]Public Affairs
Report to Congressional Committees
United States Government Accountability Office
GAO
December 2006
LONG-TERM CARE INSURANCE
Federal Program Has a Unique Profit Structure and Faced a Significant
Marketing Challenge
GAO-07-202
Contents
Letter 1
Results in Brief 4
Background 6
Federal Program Has a Unique Profit Structure 11
Federal Program Used Marketing Efforts Generally Similar to Those Used for
Other Plans but Faced a Significant Challenge 14
Claims Experience in the Federal Program Increased but Remained Lower Than
Expectations 17
Concluding Observations 18
Agency Comments 20
Appendix I Performance Measures Used for the Federal Long Term Care
Insurance Program 23
Appendix II Comments from the Office of Personnel Management 26
Appendix III GAO Contact and Staff Acknowledgments 28
Related GAO Products 29
Tables
Table 1: Profit Structure of the Federal Long Term Care Insurance Program
12
Table 2: Actual Claims per Enrollee as a Percentage of Expected Claims per
Enrollee in the First 4 Years of the Federal Long Term Care Insurance
Program 17
Table 3: Federal Long Term Care Insurance Program's Short-Term Performance
Measures, Assessed Annually 24
Table 4: Federal Long Term Care Insurance Program's Long-Term Performance
Measures, Assessed Every 3 Years 25
Figure
Figure 1: Actual Claim Payments per 10,000 Enrollees in the First 4 Years
of the Federal Long Term Care Insurance Program Compared with Expected
Claim Payments per 10,000 Enrollees over 35 Years 18
Abbreviations
NAIC National Association of Insurance Commissioners OPM Office of
Personnel Management
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
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copyright holder may be necessary if you wish to reproduce this material
separately.
United States Government Accountability Office
Washington, DC 20548
December 29, 2006
Congressional Committees
In 2004, about $193 billion was spent nationwide on long-term care
services, including nursing home care and other assisted-living services.1
Most of this care was financed by government programs, primarily by
Medicaid, a joint federal-state program that finances health insurance for
certain low-income adults and children. Elderly people--those aged 65 or
older--consume about two-thirds of all long-term care services. As the
elderly population continues to grow, particularly with the aging of the
baby boom generation, the increasing demand for long-term care services
will likely strain federal and state resources. Some policymakers propose
that increased use of long-term care insurance may be a means of reducing
the future financial burden on public programs. In 2000, Congress passed
the Long-Term Care Security Act, requiring the federal government to offer
long-term care insurance to its employees, their families, and others.2
Congressional committee reports accompanying the act indicated that a
federal long-term care insurance program could encourage people to
purchase long-term care insurance, serve as a model for other
employer-sponsored programs across the nation,3 and encourage private
payment sources to assume some of the insurance risk.4
In December 2001, at the conclusion of a competitive bidding process, the
Office of Personnel Management (OPM)--the federal agency responsible for
administering governmentwide compensation and benefit systems--entered
into a 7-year contract with Long Term Care Partners LLC (referred to as
Partners) that allows certain eligible individuals affiliated with the
federal government to apply for long-term care insurance. Individuals
eligible for the Federal Long Term Care Insurance Program include federal
and Postal Service employees and retirees; active and retired members of
the uniformed services; qualified relatives of these individuals, such as
spouses of employees and retirees; and certain others. Partners is a joint
venture formed by two large insurance carriers that sell long-term care
insurance products in the private market--John Hancock Life Insurance
Company and Metropolitan Life Insurance Company. The contract between OPM
and Partners outlines the roles and responsibilities of all parties with
respect to the program, including how payments for program expenses and
profits are determined. Partners began marketing the Federal Long Term
Care Insurance Program in February 2002, and the program began accepting
enrollment applications on March 25, 2002. As of September 30, 2006, the
federal program had 214,034 current enrollees, making it the largest
private long-term care insurance program in the nation.5
1Long-term care refers to a range of support services provided to people
who, because of illness or disability, generally are unable to perform
activities of daily living for an extended period. Such activities include
eating, bathing, dressing, using the toilet, getting in and out of bed,
and getting around the house. Some people may also need help in performing
instrumental activities of daily living, which include preparing meals,
shopping for groceries, and getting around outside.
2Pub. L. No. 106-265, 114 Stat. 762, 764 (2000).
3Senate Committee on Governmental Affairs, S. Rep. No. 106-344, at 18
(2000).
4House Committee on Government Reform, H.R. Rep. No. 106-610, at 8 (2000).
This report is the second of two reports required by the Long-Term Care
Security Act on the competitiveness of the federal program compared with
group and individual plans generally available in the private insurance
market.6 Our first report found that the program compared favorably with
other group and individual plans we reviewed in terms of benefits offered
and premiums. However, in its first 3 years, from April 1, 2002, through
March 31, 2005, the federal program's enrollment and claims
experience--that is, the number of paid claims and the amount paid for
those claims--were lower than the expectations established by Partners.7
We recommended that the Director of OPM analyze the reasons for the
lower-than-expected claims experience and, as appropriate, use the results
to modify assumptions about the expected claims experience. We also
recommended that the Director of OPM analyze the projections for the
amount of premiums collected to pay for claims. In response to these
recommendations, OPM indicated that it intended to provide updated
information on claims experience and premium setting in its written
recommendation to Congress before entering into a new contract for the
administration of the Federal Long Term Care Insurance Program. Partners'
current contract with OPM ends December 31, 2008.
5From March 25, 2002, through September 30, 2006, the federal program
enrolled 231,664 people. This number includes past enrollees as well as
those enrolled as of September 30, 2006.
6Pub. L. No. 106-265, 114 Stat. 768. The group market includes plans
offered by employers to employees and plans offered by other groups, such
as professional organizations. The individual market includes plans sold
by insurance carriers to individuals, usually through agents or brokers.
7See GAO, Long-Term Care Insurance: Federal Program Compared Favorably
with Other Products, and Analysis of Claims Trend Could Inform Future
Decisions, [19]GAO-06-401 (Washington, D.C.: Mar. 31, 2006). See also
Related GAO Products at the end of this report.
In this report, as discussed with the committees of jurisdiction, we
examined the following questions regarding other aspects of
competitiveness:
1. How does the profit structure of the Federal Long Term Care
Insurance Program as defined by the contract compare with that of
other long-term care insurance plans?
2. How do the marketing efforts for the Federal Long Term Care
Insurance Program compare with those for other long-term care
insurance plans?
3. How does the Federal Long Term Care Insurance Program's claims
experience, updated to reflect the program's fourth year, compare
with initial expectations?
To obtain information on the profit structure of the Federal Long Term
Care Insurance Program, we interviewed officials at OPM and Partners and
reviewed relevant documents, including the contract between OPM and
Partners. We limited our review to the payments that were defined in this
contract as profits. To obtain comparable information on any profit
structures used in the private sector, we interviewed officials from four
of the nation's largest long-term care insurance carriers--Bankers Life
and Casualty Company, Genworth Financial, John Hancock Life Insurance
Company, and Metropolitan Life Insurance Company.8,9 All four insurance
carriers sold products in the individual market, and two of the four--John
Hancock Life Insurance Company and Metropolitan Life Insurance
Company--were also among the five largest carriers that sold products in
the group market. We also interviewed benefits officials from four
states--California, New Jersey, North Carolina, and Texas--that offered
long-term care insurance to state employees and certain other groups,10
and we interviewed industry experts and actuaries regarding the profit
structures used in the industry.
8We selected the four carriers based on their total number of policies and
total annualized premiums--the sum of enrollee premiums adjusted to
reflect a full year of coverage--in effect in the individual market as of
December 31, 2005.
9Throughout this report, we use the term carrier officials to refer to
officials of these four insurance carriers and not to officials of
Partners.
To obtain information on marketing efforts for the Federal Long Term Care
Insurance Program, we interviewed officials from OPM and Partners and
reviewed marketing plans for the federal program. To obtain comparable
information on the marketing efforts used in the private sector, we
interviewed actuaries, industry experts, officials from the four insurance
carriers, and benefits officials from the four states.
To describe how the federal program's claims experience, updated to
reflect the program's fourth year, compared with initial expectations as
established by Partners in its contract with OPM, we analyzed data from
Partners on the number of enrollees, the number of paid claims, and the
amount of claim payments made for the federal program from April 1, 2005,
through March 31, 2006. We also included data presented in our previous
report regarding the claims experience of the federal program in its first
3 years, from April 1, 2002, through March 31, 2005. We compared the
anticipated claims experience for the federal program as established by
Partners in its contract with OPM prior to the program's start of
enrollment, with the actual number of claims paid and the amount of claims
payments during the federal program's first 4 years--from April 1, 2002,
through March 31, 2006. We also interviewed Partners officials about the
federal program's claims experience.
We reviewed all data for reasonableness and consistency and determined
that the data were sufficiently reliable for our purposes. We performed
our work in accordance with generally accepted government auditing
standards from May 2006 through December 2006.
Results in Brief
The federal program has a unique profit structure that is explicitly
defined in the contract between OPM and Partners. This profit structure
consists of three distinct annual payments to Partners that are separate
from payments made to cover the program's expenses. Two of the three
profit payments are based on a percentage of the premiums collected during
the year, and one is based on the average annual assets of the federal
program. One premium-based payment and the asset-based payment are
guaranteed. The other premium-based payment is not guaranteed, but rather
is linked to OPM's evaluation of Partners' performance, including OPM's
annual evaluation in 21 measures across 4 categories: administrative
expense savings, customer service, enrollment experience, and
responsiveness to OPM. In contrast to the federal program, profits
realized by carriers offering other long-term care insurance plans
generally are not based on an explicit profit structure. Instead, carriers
may realize profits according to the experience of the programs they
insure.
10In addition to offering long-term care insurance benefits to their
employees, retirees, and other qualified relatives, such as spouses of
employees and retirees, all four states offered benefits to other groups
of public employees, such as public university employees.
The federal program used marketing efforts that were generally similar to
those for other plans sold in the group market, but faced a significant
challenge in sending information directly to eligible individuals. The
federal program and other plans sold in the group market used marketing
efforts such as mailing information to the homes of eligible individuals,
sending e-mails to eligible employees at work, posting information on a
Web site, and hosting employee and retiree seminars. Of these efforts,
carrier officials we spoke with explained that direct mail is a critical
marketing strategy for long-term care insurance. The federal program faced
a significant challenge in mailing information to the homes of those
individuals eligible for the program because it initially did not have the
home addresses of nearly all active federal civilian employees. Because of
this challenge, the federal program relied on marketing efforts that were
less direct and less personalized, such as sending information to federal
employees through agency benefits officers and working with affinity
groups whose membership consists of eligible individuals.
The federal program's claims experience--the amount of claim payments per
enrollee and the number of paid claims per enrollee--increased in the
program's fourth year, but remained lower than Partners' expectations as
established in its contract with OPM. This increase was generally
consistent with trends since the federal program began in 2002. Overall,
the federal program has paid 44 percent of the expected amount of claim
payments per enrollee and 41 percent of the expected number of claims per
enrollee. As of August 2006, Partners officials had not determined why the
claims experience was lower than its expectations. It is generally
expected that the number of claims submitted in the first few years of a
long-term care insurance program will be a small portion of the total
number of claims submitted over time. However, claims experience is one of
several factors that may affect the long-term financial outlook of a
long-term care insurance program. The results of this analysis underscore
our prior recommendations that OPM analyze the claims experience and
assumptions affecting premiums to inform forthcoming contract negotiations
for the administration of the federal program. These negotiations may
occur prior to December 31, 2008, the end of Partners' current contract.
In commenting on a draft of this report, OPM generally agreed with our
findings. Regarding the program's profit structure, OPM stated that now
that it has more operating experience with the program, it plans to
reexamine the profit structure as it renegotiates or rebids the contract
for the administration of the program. In its comments, Partners
highlighted certain distinct aspects of the federal program's profit
structure that we noted in our draft report, including that Partners does
not own federal program assets and that a profit payment is contingent on
Partners meeting specific performance standards that Partners
characterized as exceptionally high for the insurance industry in general.
Background
Long-term care, which may include care provided in nursing homes,
assisted-living facilities, or a person's home, can be expensive. In 2005,
the average cost of a year in a nursing home was more than $70,000,11 and
in 1999, according to the most recent data available, the average length
of stay was between 2 and 3 years.12 Long-term care insurance helps
individuals pay for costs associated with long-term care services. Yet
relatively few individuals have obtained coverage. As of 2002, about 9
million people nationwide had obtained long-term care insurance.13 To help
federal employees, retirees, and others obtain coverage, the federal
government began offering long-term care insurance in 2002.
Long-Term Care Insurance
Long-term care insurance helps pay for the costs associated with long-term
care services. People can purchase long-term care insurance directly from
carriers that sell products in the individual market, or they can enroll
in plans offered by employers or other groups. For a specified premium
that is designed--but not guaranteed--to remain level over time, the
carrier agrees to provide covered benefits under an insurance contract.
11Metropolitan Life Insurance Company, The MetLife Market Survey of
Nursing Home & Home Care Costs (Westport, Conn.: September 2005).
12U.S. Department of Health and Human Services, Centers for Disease
Control and Prevention, National Center for Health Statistics, The
National Nursing Home Survey: 1999 Summary (Hyattsville, Md.: June 2002).
13America's Health Insurance Plans, Research Findings, Long-Term Care
Insurance in 2002 (Washington, D.C.: June 2004).
Long-term care insurance premiums are affected by many factors, including
the benefits offered and the age and health status of the applicant.
Carriers review the health status of the applicant during the underwriting
process.14 Carrier assumptions about interest rates, mortality rates,
morbidity rates,15 and lapse rates--the number of people expected to drop
their policies over time--also affect premium rates. Carriers set premium
rates to cover the anticipated cost of enrollee benefits (which means
paying approved claims),16 administrative costs (which includes marketing
costs, claims handling, overhead, and taxes), and profits.
Few claims are expected to be submitted during the early years of an
enrollee's long-term care insurance policy. As a result of underwriting,
it is unlikely that many people could meet the eligibility requirements to
buy a policy yet submit an approved claim within 3 years. Industry experts
suggest that the rate of claim submissions begins to increase after about
3 to 7 years.
Claims experience is one of many factors--such as interest rates and lapse
rates--that affect the long-term financial outlook of a long-term care
program. While having a lower-than-expected claims experience is a
positive financial indicator, if the claims experience is significantly
lower than expected over the long term, then it is possible that the
premiums are too high. On the other hand, in accordance with the National
Association of Insurance Commissioners (NAIC) premium-setting guidelines,
it may be appropriate to project the claims experience assuming moderately
adverse results to protect against the need to raise premiums.17
14Underwriting is the process of reviewing an applicant's responses to
questions, including medical and health-related questions, in an
application for the carrier to determine if the applicant is insurable and
the premium rate is appropriate, given the level of risk the applicant
presents for the insurance coverage.
15The term morbidity refers to the incidence of illness, injury, or
disability.
16For the purposes of this report, a claim refers to the series of
payments made to reimburse the provider or the policyholder for the costs
of an episode of care.
17State insurance regulators established NAIC to help promote effective
insurance regulation, to encourage uniformity in approaches to regulation,
and to help coordinate states' activities. Among other activities, NAIC
develops model laws and regulations to assist states in formulating their
policies to regulate insurance.
Insurance carriers' long-term care insurance profits--defined as the
excess of revenues over expenses--are affected by many factors, including
the amount of risk the insurance carrier assumes. In general, the more
risk a carrier assumes, the greater the carrier's expected profits. Over
time, carriers' ability to meet or exceed their initial projections
regarding interest rates, mortality rates, morbidity rates, and lapse
rates, as well as their ability to contain costs, ultimately affects their
profits. Carriers are also subject to state requirements, which may affect
their ability to realize profits.
Long-Term Care Insurance Marketplace
Long-term care insurance is sold in two primary markets--the individual
and group markets. Of the nearly 9 million policies sold as of 2002, the
most recent year for which data were available, about 80 percent were sold
through the individual market, and the remaining 20 percent were sold
through the group market.18 Sales in the group market are growing faster
than sales in the individual market.19 In March 2006, 13 percent of
full-time employees in private industry had access to employer-sponsored
long-term care insurance benefits; 20 percent of employees of
establishments with 100 or more employees had access to this benefit.20
The individual market includes plans sold by insurance carriers to
individuals, usually through agents or brokers. Individuals may choose
benefits from a range of options offered by the carriers, including the
duration and amount of daily benefit payments. Those who purchase coverage
through the individual market typically pay the full premium. The carrier
generally owns program assets and bears the risk of insuring enrollees for
the terms of enrollees' policies.
The group market includes long-term care insurance plans offered to
individuals through employers and other groups, such as professional
associations. In this market, the groups usually design the benefits, and
enrollees are often given some benefit options from which to choose,
including the duration and amount of daily benefit payments. However,
benefit options offered in the group market tend to be fewer than those
offered in the individual market. Individuals who purchase long-term care
insurance in the group market typically pay the full premium, similar to
those who purchase coverage in the individual market.21
18America's Health Insurance Plans, Research Findings.
19Jonathan Shreve and Ksenia Whittal, "Group LTC Continues Its Solid
Advance," National Underwriter Life & Health, vol. 110, no. 37 (2006), p.
20.
20U.S. Department of Labor, Bureau of Labor Statistics, National
Compensation Survey: Employee Benefits in Private Industry in the United
States, March 2006 (Washington, D.C.: August 2006).
Employers and other groups typically contract with insurance carriers to
provide long-term care insurance to qualified individuals.22 These
contracts may be time-limited, lasting, for example, 3 to 5 years. Under
these contracts, carriers are usually required to bear the risk of
insuring enrollees for the terms of enrollees' policies; the term of
enrollees' policies may be independent from, and therefore longer than,
the length of an employer's contract with a carrier. These carriers also
generally own all program assets. As a result, if a carrier's contract
with an employer was not renewed, the carrier would usually be required by
its contract to continue insuring those individuals for whom it issued
policies.
Several large carriers dominated the long-term care insurance coverage
sold in the individual and group markets, as of December 31, 2005. While
the long-term care insurance industry experienced 18 percent annual growth
in the number of policies sold from 1987 through 2002,23 the industry has
experienced a downturn in more recent years, according to industry
experts. Specifically, carriers faced several challenges, including
higher-than-expected administrative expenses relative to premiums;
lower-than-expected lapse rates, which increased the number of people
likely to submit claims; low interest rates, which reduced the actual
return on investments below what had been assumed; and new state
regulations that limited direct marketing by telephone. As a result,
beginning in 2003, for example, many carriers in the individual market
raised premiums, left the marketplace, or consolidated to form larger
companies. In addition, many carriers have revised the assumptions used in
setting premiums, taking a more conservative approach that has led to
higher premiums, while state regulators have increased their oversight of
the industry.
21In contrast, individuals who purchase health insurance plans in the
group market typically do not pay the full premium because employers often
pay a share of the premium.
22Alternatively, employers may self-fund their long-term care insurance
plans.
23America's Health Insurance Plans, Research Findings.
Federal Long Term Care Insurance Program
The federal government began offering a group long-term care insurance
program in 2002 whereby certain eligible individuals affiliated with more
than 125 federal agencies may apply for coverage. Individuals eligible for
the Federal Long Term Care Insurance Program include federal and Postal
Service employees and retirees; active and retired members of the
uniformed services; qualified relatives of these individuals; and certain
others.24 Almost 19 million people were estimated to be eligible for
coverage as of October 15, 2001. With more than 214,000 current enrollees
as of September 2006, the federal program is the largest
employer-sponsored group program in the nation. When the Federal Long Term
Care Insurance Program began, eligible individuals could apply for
enrollment during two specified periods: an early enrollment period held
from March 25, 2002, through May 15, 2002, and an open enrollment period
held from July 1, 2002, through December 31, 2002.25 Following the open
enrollment period, eligible individuals could apply for coverage at any
time.26 As is typical for other plans sold in the group market, enrollees
pay the entire cost of their premium. As we noted in our March 2006
report, the federal program offered benefits similar to those of other
long term-care insurance products, usually at lower premiums for
comparable benefits, and the federal program's early enrollment and claims
were lower than initially expected.27
24Qualified relatives include current spouses of employees and retirees;
adult children at least 18 years old--including natural, adopted, and
stepchildren, but not foster children--of living employees and retirees;
and parents, parents-in-law, and stepparents of living employees, but not
of retirees. Selected military reservists; employees and retirees of the
Tennessee Valley Authority; District of Columbia government employees and
retirees first employed before October 1, 1987; and employees and retirees
of the District of Columbia courts are also eligible to apply for
coverage.
25During the early enrollment period, enrollees' choices for some of the
benefit options, such as the benefit period and type of coverage, were
limited, whereas enrollees were able to select from all of the program's
benefit options during the open enrollment period. During both of these
enrollment periods, the program used an abbreviated underwriting
application to determine eligibility for active employees and active
members of the uniformed services and their spouses. For all other
applicants, the program used a full underwriting application. The federal
program's abbreviated underwriting application consists of fewer
health-related questions than the program's full underwriting application.
26Since the open enrollment period, the program has used an abbreviated
underwriting application to determine eligibility for newly hired federal
and Postal Service employees and newly active members of the uniformed
services and their spouses who apply for coverage within 60 days of
employment. For all other applicants, the program has used a full
underwriting application.
27 [20]GAO-06-401 .
OPM oversees the federal program, and Partners administers the program in
accordance with the requirements of a 7-year contract between OPM and
Partners. The contract, signed December 18, 2001, defines key
administrative requirements, including OPM's oversight of the program and
how payments for the federal program's expenses, as well as payments that
are earmarked as profits, are determined. Unlike other contracts between
employers and carriers, the federal program's contract includes
requirements for the management of federal program assets--that is, the
funds collected as premiums and used to pay claims--because the federal
program does not give Partners ownership of federal program assets.
By statute, OPM's contract with Partners is for 7 years and is not
automatically renewable.28 At the end of the 7-year term, OPM can either
renegotiate the contract with Partners, or allow the contract to terminate
and select a new carrier. If a new carrier is selected, Partners must
transfer all federal program enrollees and assets, including any positive
or negative returns related to the experience of the program, to the
federal program's next carrier. However, if OPM does not contract with
another carrier, Partners would continue insuring the individuals who
enrolled in the federal program through Partners. In this case, the
federal program's assets would remain available to Partners to pay for
claims and expenses.
Federal Program Has a Unique Profit Structure
The federal program has a unique profit structure that is explicitly
defined in the contract between OPM and Partners. This profit structure
consists of three distinct annual payments to Partners to compensate
Partners for the risks it assumes under the program's 7-year contract.29
Of these payments, two are based on a percentage of the premiums collected
during the year and one is based on the average annual assets of the
federal program. (See table 1.) These three payments are allowed only if
premiums are sufficient to cover the federal program's current claims and
expenses. In contrast to the federal program, profits realized by carriers
offering other long-term care insurance plans generally are not based on
explicit profit structures. Instead, under the terms of their contracts,
carriers assume the risk of insuring enrollees for the terms of enrollees'
policies and own program assets--and are thus able to realize profits or
losses according to the experience of the programs they insure.
28Pub. L. No. 106-265, 114 Stat. 765-766.
29The profit payments are intended as profits, but do not ensure that
Partners realizes a profit because the payments are not linked to
Partners' actual costs for the program. In addition to profit payments,
the federal program pays Partners for the program's expenses, such as
those for marketing, underwriting, and claims administration.
Table 1: Profit Structure of the Federal Long Term Care Insurance Program
Payment type Payment amount
Premium-based payments
Guaranteed 3.5 percent of the premiums collected during the year
Performance-based Up to 3.0 percent of the premiums collected during the
year--the actual amount is determined by OPM based on
its assessment of Partners' performance
Asset-based payment
Guaranteed 0.3 percent of the average annual assets of the
federal program
Source: GAO analysis of OPM's contract with Partners.
Note: These three payments are allowed only if premiums are sufficient to
cover the federal program's current claims and expenses.
The federal program guarantees one annual premium-based payment to
Partners. This payment equals 3.5 percent of the premiums collected in a
year. For other long-term care insurance plans offered in the group and
individual markets, carriers' profits were generally not guaranteed,
according to carrier officials and industry experts. Similar to the
federal program, one source of carriers' revenue is enrollee premiums,
which include an amount for anticipated profits. However, carriers may
realize profits or losses according to the experience of the programs they
insure, subject to applicable state regulations.30
The federal program links the second annual premium-based payment to OPM's
evaluation of Partners' performance. This payment can equal up to 3
percent of the premiums collected in a year. Under an agreement which
amended the contract between OPM and Partners and became effective
beginning fiscal year 2006, OPM evaluates Partners' performance each year
on 21 short-term performance measures across 4 categories: administrative
expense savings, customer service, enrollment experience, and
responsiveness to OPM.31 Each performance measure has a corresponding
payment equivalent to a percentage of the total performance-based payment
of 3 percent of premiums. If Partners' performance does not meet stated
expectations in a measure, the payment corresponding to that measure is
placed into a retained profit account. In addition, every 3 years, OPM
evaluates Partners' performance in two long-term performance measures:
return on investment and claims experience. If Partners meets expectations
in one measure and funds are present in the retained profit account,
one-half of the amount present in the retained profit account is paid to
Partners. If Partners meets expectations in both measures and funds are
present in the retained profit account, the total amount present in the
retained profit account is paid to Partners. As of September 2006,
Partners has been awarded the full performance-based payment each year
since the federal program began. Appendix I provides a complete list of
the performance measures used for the federal program.
30The terms of contracts under the federal program relating to coverage or
benefits, including those pertaining to carrier profit, will supersede and
preempt applicable state regulations. Pub. L. No. 106-265, 114 Stat. 768,
5 U.S.C. S 9005 (2005); 5 C.F.R. S 875.107 (2006).
Unlike the federal program, most other sponsors of plans offered in the
group market usually did not link carrier profits to performance
evaluations, according to carrier officials and industry experts. Carrier
officials estimated that about 10 percent to 20 percent of employers
required their long-term care insurance carrier to relinquish a certain
percentage (for example, 2 percent to 4 percent) of premiums if their
performance did not meet agreed-upon expectations.32 However, employers
may require carriers to guarantee a certain level of performance in their
contracts to ensure that enrollees are provided with standard levels of
service, according to state officials.33 These performance measures and
guarantees may include those related to the timeliness of underwriting
decisions and call center performance. The federal program used all of the
performance measures that industry experts and carrier officials cited as
those commonly used throughout in the group market, in addition to other
measures such as administrative expense savings and claims experience.
31From the beginning of the program through fiscal year 2005, the federal
program subjected the same portion of profit payments to OPM's annual
evaluation of Partners' performance and rated Partners' performance in 10
or 11 categories as exceeding, meeting, or not meeting expectations. In
fiscal year 2005, OPM and Partners renegotiated the performance evaluation
agreement at OPM's request to make it more challenging. The new
performance evaluation agreement, beginning in fiscal year 2006, allowed
ratings of only meeting or not meeting expectations in 21 measures across
4 categories. Partners officials told us that the new performance
evaluation agreement was more challenging for them to meet than the prior
agreement.
32The carrier officials we spoke with explained that the carriers they
represent had never had to relinquish profits as a result of a poor
performance rating.
33Employers may impose nominal fines (for example, $25 to $50 per
violation) on carriers who do not meet performance guarantees.
The federal program's third payment is guaranteed and is based on the
average annual assets of the program. This annual payment--0.3 percent of
the average annual assets of the federal program--is defined in the
contract between OPM and Partners as a profit payment. The federal program
developed this payment to recognize that insurers in general are required
to hold risk-based capital. Risk-based capital is the capital that an
insurance carrier is required to hold in reserve, separate from any other
funds used to back insurance liabilities or other lines of business, to
protect the carrier from insolvency.34 OPM does not require Partners to
use the third payment to fund risk-based capital and both OPM and Partners
consider this payment another form of profit for administering the
program. Similar to the federal program, carriers use enrollee premium
funds to fund risk-based capital requirements, according to OPM officials.
However, risk-based capital may be considered an expense to carriers.
Federal Program Used Marketing Efforts Generally Similar to Those Used for Other
Plans but Faced a Significant Challenge
The federal program used marketing efforts that were generally similar to
those used for other plans sold in the group market.35 For example, the
types of marketing efforts used for the federal program and other plans
offered in the group market, according to our review of federal program
documents and the carrier and state officials we spoke with, included
34Carriers determine the amount of capital to be held as risk-based
capital based on their assessment of the risks they assume according to
standards issued by the NAIC.
35In the individual market, carrier officials we spoke with said that they
perform limited direct marketing to potential enrollees. Instead, carriers
rely on individual agents to identify prospective applicants and sell a
plan, at times in a one-on-one setting.
o mailing information directly to the homes of eligible
individuals,
o sending e-mails to eligible employees at work,
o posting information on a Web site,
o hosting employee and retiree seminars, and
o working with affinity groups whose membership consists of
eligible individuals.
Of these efforts, carrier officials we spoke with told us that
direct mail, which may include a personalized letter, is a
critical marketing effort for long-term care insurance plans. One
carrier official also explained that direct mail was so critical
to the carrier's marketing strategy that it generally would not
work with employers who neither provide the home addresses of
employees nor assist in mailing materials to employees.
The federal program faced a significant challenge in sending
information directly to eligible individuals, particularly through
direct mail. Specifically, the federal program was initially
unable to mail information directly to the homes of about 60
percent of the program's core group of eligible individuals that
Partners deemed most likely to enroll in the federal
program--including nearly all active federal civilian
employees--because neither OPM nor Partners had the home addresses
of these individuals. OPM officials told us that a centralized
database of this information does not exist. According to OPM
officials, OPM did not request federal employees' home address
information from other federal agencies because they felt it would
be too burdensome to comply with certain Privacy Act
requirements36 and gather accurate information from each of the
agencies in a timely manner. Despite this challenge, the federal
program initially mailed information directly to the homes of
those for whom it had addresses, which included about 40 percent
of the program's core group of eligible individuals, as well as
other non-core groups such as retired military personnel and
annuitants under the Civil Service Retirement System and the
Federal Employees Retirement System, according to our analysis of
Partners' data.37 As of October 2006, Partners officials noted
that direct mail efforts were still limited because of the federal
program's inability to mail information directly to the homes of
most active federal civilian employees.38 Before signing its
contract with OPM, Partners was aware of the federal program's
limitations regarding direct mail.
As a result of the federal program's limited ability to send
direct mail to many eligible individuals, the federal program
relied heavily on marketing efforts that were less direct and less
personalized, including sending information to federal employees
through agency benefits officers and working with affinity groups.
Because neither OPM nor Partners has direct access to federal
employees through e-mail, Partners has worked with more than 150
agency benefits officers to distribute program information to
federal employees through e-mail, internal office mail, or other
means.39 For example, Partners relies on agency benefits officers
to send e-mails about the federal program.40 While Partners
officials may be notified by agency benefits officers when they
send program information, Partners is unable to determine whether
all eligible federal employees receive this information. In
addition, Partners has worked with several affinity groups, such
as Federally Employed Women and the National Active and Retired
Federal Employees Association, to educate their members about the
need for long-term care insurance and to advertise in publications
and at sponsored events. Through these efforts, Partners has
gained direct access to the groups' members.
Claims Experience in the Federal Program Increased but Remained
Lower Than Expectations
In the federal program's fourth year, claims experience--the
amount of claim payments per enrollee and the number of paid
claims per enrollee--increased from that of the program's third
year, but remained lower than Partners' expectations as
established in its contract with OPM. This increase was generally
consistent with trends since the federal program began in 2002. As
we reported in March 2006, claims experience in the federal
program's first 3 years was lower than the initial expectations
set by Partners.41 Our analysis of Partners' data showed that
claims experience also remained lower than expected for the
federal program's fourth year. As of March 31, 2006, the end of
the federal program's fourth year, the federal program had
cumulatively paid 44 percent of the expected amount of claim
payments per enrollee and 41 percent of the expected number of
claims per enrollee, across the 4 years, as shown in table 2.
Figure 1 shows the amount of claims payments per 10,000 enrollees.
As of August 2006, Partners had not determined why the claims
experience was lower than Partners' expectations. Claims
experience is one of many factors--such as interest rates and
lapse rates--that affect the long-term financial outlook of a
long-term care insurance program. While it is generally expected
that the number of claims submitted in the first few years of a
long-term care insurance program will be a small portion of the
total number of claims submitted over time, the rate of claim
submissions usually begins to increase after about 3 to 7 years,
according to industry experts.
Table 2: Actual Claims per Enrollee as a Percentage of Expected
Claims per Enrollee in the First 4 Years of the Federal Long Term
Care Insurance Program
Claims experience Year 1 Year 2 Year 3 Year 4 Cumulative
Amount of claim payments per
enrollee as a percentage of
expected claims per enrollee 40% 39% 40% 50% 44%
Number of paid claims per enrollee
as a percentage of expected claims
per enrollee 4% 37% 48% 56% 41%
Source: GAO analysis of data provided by Partners.
Notes: Partners established expectations for enrollment and claims
in its contract with OPM. We reviewed claims data for the first 4
years of the federal program, April 1, 2002, through March 31,
2006.
Figure 1: Actual Claim Payments per 10,000 Enrollees in the First
4 Years of the Federal Long Term Care Insurance Program Compared
with Expected Claim Payments per 10,000 Enrollees over 35 Years
Notes: Partners established expectations for enrollment and claims
in its contract with OPM. We reviewed claims data for the first 4
years of the federal program, April 1, 2002, through March 31,
2006.
Concluding Observations
Our findings from two reports together show that the Federal Long
Term Care Insurance Program compared favorably with other plans,
has a unique profit structure, and used marketing efforts that
were generally similar to those of other plans, but faced a
significant challenge. Specifically, our initial report found that
the federal program offered benefits similar to those of other
long-term care insurance products, usually at lower premiums for
comparable benefits. In this, our second report, we examined other
components of the federal program's competitiveness, including the
federal program's profit structure and marketing efforts. We found
that the federal program has a unique profit structure, created to
compensate Partners for the risks it assumed for the program. The
risks borne by Partners, however, are not as great as those
assumed by carriers selling other plans because, unlike with other
plans, the federal program's assets are owned by the program, not
by the insurer. Because of this structure, the program does not
link Partners' profits to the overall experience of the program.
Rather, the program guarantees some profit payments, links some
profit payments to OPM's evaluation of Partners' performance, and
requires Partners to assume a potentially time-limited risk, after
which all program assets and enrollees may be transferred to
another carrier. Insurance carriers' profits are linked to the
amount of risk they bear, and Partners assumes less risk for
insuring the federal program than do carriers for insuring other
long-term care insurance plans. Therefore, the federal program's
profit payments would likely be lower than the profits realized by
carriers selling other plans. In addition, while the federal
program used marketing efforts that were generally similar to
those used for other plans sold in the group market, the program
faced a significant challenge in providing personalized marketing
communications directly to eligible individuals and instead relied
heavily on other marketing efforts.
In our initial report we found that the federal program's claims
experience--the amount and number of claims payments per
enrollee--was lower than expected in the first 3 years of the
program. While it is generally expected that the number of claims
submitted in the first few years of a long-term care insurance
program will be a small portion of the total number of claims
submitted over time, a program's claims experience is one of
several factors that may affect the long-term financial outlook of
the program. In response to our recommendation in the initial
report that OPM analyze the claims experience and assumptions
affecting premiums to inform forthcoming contract negotiations,
OPM indicated that it intended to provide updated information on
claims experience and premium setting in its written
recommendation to Congress before entering into the next contract
for the administration of the Federal Long Term Care Insurance
Program. Partners' current contract with OPM for the
administration of the federal program ends December 31, 2008.
After reviewing a fourth year of claims data, we note that the
program's claims experience increased from that of the program's
third year, but still remains lower than Partners' expectations.
These results underscore the importance of our prior
recommendations that OPM analyze the claims experience and
assumptions as it considers its recommendations to Congress
regarding a future contract.
Agency Comments
We provided a draft of this report to OPM and Partners. In its
written comments, OPM generally agreed with our findings. OPM's
comments are reprinted in appendix II.
With regard to the program's unique profit structure, OPM stated
that now that it has more operating experience with the program,
it plans to reexamine the profit structure as it renegotiates or
rebids the contract for the administration of the program. OPM
agreed that the marketing efforts for the federal program are more
challenging for Partners than for other insurers because, among
other reasons, home addresses for federal employees are generally
not available. OPM noted that this will continue to be a
constraint for the program in the future. In addition, OPM
highlighted, as we noted in our draft report, that the ratio of
actual to expected claims experience has narrowed and stated that
it would continue to closely monitor the claims experience of the
program. We support this effort and continue to encourage OPM to
analyze the program's claims experience and ensure that premiums
and actuarial assumptions about future claims reflect the
experience of the program.
In its comments, Partners highlighted certain distinct aspects of
its profit structure that we noted in our draft report, including
that Partners does not own federal program assets and that a
profit payment is contingent on meeting specific performance
standards that Partners characterized as exceptionally high for
the insurance industry in general. Partners also stated that
profit payments are paid only if the federal program's assets are
sufficient to cover the risks incurred by the program, as our
draft report noted. Regarding the marketing efforts used for the
federal program, Partners noted that the terrorist attacks of 2001
and the anthrax scare, which caused heightened security at federal
buildings, added to the marketing challenge acknowledged in the
report. We revised the report to reflect these circumstances.
Finally, Partners commented, and as we noted in our draft report,
that in addition to a program's claims experience, premium rates
are affected by a number of factors, including lapse rates and
interest rates.
OPM and Partners provided technical comments and clarifications,
which we incorporated as appropriate.
We are sending copies of this report to the Director of OPM and
interested congressional committees. We will also provide copies
to others on request. In addition, this report is available at no
charge on the GAO Web site at http://www.gao.gov .
If you or your staff have any questions about this report, please
contact me at (202) 512-7119 or dickenj@gao.gov . Contact
points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. GAO staff
who made major contributions to this report are listed in appendix
III.
John E. Dicken
Director, Health Care
36The Privacy Act of 1974, outside a framework of specified exceptions,
prohibits an agency from disclosing a record to any person or another
agency, except at the request of, or with the prior consent of, the
individual to whom that record pertains. See 5 U.S.C. S 552a (2000).
37In total, the federal program mailed information to about 6.6 million
eligible individuals during the open enrollment period, according to
Partners' data. These individuals represented about 35 percent of the
total estimated 18.6 million individuals eligible for coverage as of
October 15, 2001.
38Partners officials told us that they had obtained addresses for about 22
percent of all active federal civilian employees as of October 2006. This
percentage includes current enrollees as well as other eligible
individuals.
39Partners officials also noted that increased security measures taken in
the fall of 2001 in response to the terrorist attacks of September 11,
2001, and the anthrax scare temporarily reduced access to federal
employees for marketing purposes during the program's open enrollment
period.
40Partners is able to directly e-mail information to those who provided
their e-mail address in response to a marketing solicitation.
41 [33]GAO-06-401 .
List of Committees
The Honorable John Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate
The Honorable George V. Voinovich
Chairman
The Honorable Daniel K. Akaka
Ranking Minority Member
Subcommittee on Oversight of Government Management, the Federal Workforce,
and the District of Columbia
Committee on Homeland Security and Governmental Affairs
United States Senate
The Honorable Duncan L. Hunter
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives
The Honorable Jon C. Porter
Chairman
The Honorable Danny K. Davis
Ranking Minority Member
Subcommittee on the Federal Workforce and Agency Organization
Committee on Government Reform
House of Representatives
Appendix I: Performance Measures Used for the Federal Long Term Care
Insurance Program
The Federal Long Term Care Insurance Program makes some profit
payments to Long Term Care Partners LLC (Partners) according to
the Office of Personnel Management's (OPM) evaluation of Partners'
performance. Beginning in fiscal year 2006, OPM evaluates
Partners' performance each year on 21 short-term performance
measures across 4 categories: administrative expense savings,
customer service, enrollment experience, and responsiveness to OPM
(see table 3). Every 3 years, OPM also evaluates Partners'
performance in two long-term performance measures: claims
experience and return on investment (see table 4).
Table 3: Federal Long Term Care Insurance Program's Short-Term
Performance Measures, Assessed Annually
Category Performance measure
Administrative expense savings Actual administrative expenses compared to
budgeted amounts set by OPM and Partners
Customer service Billing: timeliness of posting payroll and
annuity payments
Billing: timeliness of processing
automatic bank withdrawal reversalsa
Billing: timeliness of processing billing
changes
Billing: timeliness of sending payroll
bills to payroll providers
Call center: call abandonment rate
Call center: call answering speed
Call center: customer satisfaction with
customer service
Call center: timeliness of callbacks
Call center: timeliness of response to
written or e-mail inquiries
Claims: accuracy of claims payments
Claims: timeliness of claims payments
Care coordination: customer satisfaction
with care coordination services
Care coordination: timeliness of benefit
determinations
Underwriting: timeliness of initial
underwriting decisions
Underwriting: timeliness of
reconsideration decisions
Enrollment experience Actual enrollment compared with enrollment
goals set by OPM and Partners
Responsiveness to the Office of General working relationship with OPM
Personnel Management (OPM) Monitoring and reporting on industry
trends to OPM
Timeliness of submitting plans that
address deficiencies reported by OPM
Timeliness of reporting significant events
to OPMb
Source: OPM.
aIndividuals may allow the federal program to deduct money from
their bank account to pay premiums through automatic bank
withdrawal. Reversals of these withdrawals may occur as a result
of insufficient funds.
bSignificant events are those that may be expected to have a
material effect upon Partners' ability to meet its contractual
obligations to OPM. Such events may include the disposal of 25
percent or more of Partners' assets within a 6-month period, the
termination of a contract or subcontract that may have an effect
on Partners' ability to meet its contractual obligations, or the
discovery of fraud related to the federal program.
Table 4: Federal Long Term Care Insurance Program's Long-Term
Performance Measures, Assessed Every 3 Years
Category Performance measure
Claims experience Claims experience compared with expectations, as set
by Partners in its contract with OPM, adjusted to
reflect the demographic characteristics of actual
enrollees
Return on investment Investment performance compared with contractual
benchmark
Source: OPM.
Appendix II: Comments from the Office of Personnel Management
Appendix III: GAO Contact and Staff Acknowledgments
GAO Contact
John E. Dicken, (202) 512-7119 or dickenj@gao.gov
Acknowledgments
In addition to the contact named above, Christine Brudevold,
Assistant Director; Patricia Roy; Timothy Walker; and Rasanjali
Wickrema made key contributions to this report.
Related GAO Products
Long-Term Care Insurance: Federal Program Compared Favorably with
Other Products, and Analysis of Claims Trend Could Inform Future
Decisions. [24]GAO-06-401 . Washington, D.C.: March 31, 2006.
Overview of Long-Term Care Partnership Program. [25]GAO-05-1021R .
Washington, D.C.: September 9, 2005.
Long-Term Care Financing: Growing Demand and Cost of Services Are
Straining Federal and State Budgets. [26]GAO-05-564T . Washington,
D.C.: April 27, 2005.
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www.gao.gov/cgi-bin/getrpt?GAO-07-202 .
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Highlights of [35]GAO-07-202 , a report to congressional committees
December 2006
LONG-TERM CARE INSURANCE
Federal Program Has a Unique Profit Structure and Faced a Significant
Marketing Challenge
Spending on long-term care services--about $193 billion in 2004--is
expected to rise. In 2000, Congress passed the Long-Term Care Security
Act, requiring the federal government to offer long-term care insurance.
To do so, the Office of Personnel Management (OPM) contracted with Long
Term Care Partners LLC (Partners) to create the Federal Long Term Care
Insurance Program. This is the second of two reports required by the act
on the competitiveness of the federal program. GAO's March 31, 2006,
report, Long-Term Care Insurance: Federal Program Compared Favorably with
Other Products, and Analysis of Claims Trend Could Inform Future Decisions
(GAO-06-401), found that the federal program's benefits and premiums
compared favorably with other plans, but enrollment and claims
experience--the amount and number of claims payments--were lower than
Partners expected.
In this report, GAO compared the federal program's profit structure and
marketing efforts with those of other plans and updated its analysis of
the program's claims experience. GAO reviewed the contract between OPM and
Partners and interviewed OPM, Partners, and insurance carrier officials,
as well as actuaries and industry experts. GAO also analyzed data on claim
payments for the federal program since it began in 2002.
The Federal Long Term Care Insurance Program has a unique profit structure
that is explicitly defined in the contract between OPM and Partners. This
profit structure consists of three distinct annual payments to Partners:
(1) a guaranteed payment of 3.5 percent of the year's collected premiums,
(2) a payment linked to OPM's evaluation of Partners' performance of up to
3 percent of the year's collected premiums, and (3) a guaranteed payment
of 0.3 percent of the average annual assets of the program. These payments
are separate from other payments made to cover the program's expenses. In
contrast to the federal program, profits realized by carriers offering
other long-term care insurance plans generally are not based on explicit
profit structures, but rather on the experience of the programs they
insure.
The federal program's marketing efforts were generally similar to those
used for other plans sold in the group market, but faced a significant
challenge in sending information directly to eligible individuals. The
federal program and other plans sold in the group market used such
marketing efforts as mailing information to the homes of eligible
individuals and hosting employee and retiree seminars. Of these efforts,
carrier officials GAO spoke with explained that mailing to the homes of
eligible individuals was critical to their marketing strategy. The federal
program faced a significant challenge in mailing information to the homes
of those eligible for the program because it initially did not have the
home addresses for nearly all active federal civilian employees. Because
of this challenge, the federal program relied heavily on marketing efforts
that were less direct and less personalized, such as sending information
to federal employees through agency benefits officers.
The federal program's claims experience increased in the program's fourth
year, but remained lower than the expectations established by Partners in
its contract with OPM. This increase was generally consistent with trends
since the federal program began in 2002. Overall, the federal program has
paid
44 percent of the expected amount of claim payments per enrollee and
41 percent of the expected number of claims per enrollee. As of August
2006, Partners officials had not determined why the claims experience was
lower than Partners' expectations. While it is generally expected that the
number of claims submitted in the first few years of a long-term care
insurance program will be a small portion of the total number of claims
submitted over time, a program's claims experience is one of several
factors that may affect its long-term financial outlook. The results of
this analysis underscore GAO's prior recommendations that OPM analyze the
claims experience and assumptions affecting premiums to inform forthcoming
contract negotiations.
In commenting on a draft of this report, OPM generally agreed with the
report's findings.
References
Visible links
19. http://www.gao.gov/cgi-bin/getrpt?GAO-06-401
20. http://www.gao.gov/cgi-bin/getrpt?GAO-06-401
24. http://www.gao.gov/cgi-bin/getrpt?GAO-06-401
25. http://www.gao.gov/cgi-bin/getrpt?GAO-05-1021R
26. http://www.gao.gov/cgi-bin/getrpt?GAO-05-564T
33. http://www.gao.gov/cgi-bin/getrpt?GAO-06-401
35. http://www.gao.gov/cgi-bin/getrpt?GAO-07-202
*** End of document. ***