Senators advocate long-term care insurance for feds

Two senators and a Clinton administration official urged the Senate Tuesday to move forward with legislation on long-term care insurance for federal employees, retirees and their families.

Sens. Barbara A. Mikulski, D-Md., and Charles E. Grassley, R-Iowa, testified along with Office of Personnel Management director Janice R. Lachance before a Senate Governmental Affairs subcommittee on the immediate need for affordable and accessible long-term care.

"It is clear that we have a long-term care problem. The Office of Personnel Management estimates that 96,000 federal employees will be retiring in the year 2001. Providing federal employees with a long-term care insurance benefit is a down payment on a solution," said Mikulski.

On May 9, the House passed its version of a long-term care insurance bill (H.R. 4040). Long-term care is not part of any current health insurance plan offered to federal employees or retirees.

Long-term care insurance covers the medical costs of extended illness, including home health care, nursing home care and care in assisted living.

Both bills direct the Office of Personnel Management to invite bids from private insurers to offer coverage for employees and their spouses, children and other close relatives at discounted group rates. Employees and their eligible family members would pay the insurance premiums, but rates are expected to be discounted as much as 20 percent.

Mikulski said caring for her father who has Alzheimer's disease prompted her to become involved in the long-term care issue. She said it cost her family about $36,000 a year in the late 1980s to provide adequate care for him. Nursing home costs can now range anywhere from $40,000 to $70,000 a year.

"At least 5.8 million Americans aged 65 or older currently need long-term care," Mikulski testified.

Both witnesses and committee members emphasized the bill's potential as a model for the country, and stressed the importance of working together with the private sector on this issue.

"As our nation's largest employer, we have the opportunity now to help millions of American families plan responsibly for their retirement and gain the security that is necessary for achieving a high quality of life in retirement years," said Grassley in his testimony.

If the Senate passes the bill and Clinton signs it into law, it would be the largest employer-based long-term care insurance program in the country, with a potential of 13 million beneficiaries, according to Sen. Max Cleland, D-Ga., a co-sponsor of the bill and a member of the Subcommittee on International Security, Proliferation and Federal Services.

Lachance testified that OPM has consulted private sector companies who offer long-term care insurance on best practices.

She said OPM would launch an aggressive campaign to educate employees about the program and their options, using every medium available from the Internet to instructional CD-ROMs.

Lachance also said OPM will be working closely with insurance carriers, Congress, and the General Accounting Office on securing financially sound carriers that will provide adequate benefits for employees.

For people who already have a long-term care insurance policy and wish to switch over to the federal government's plan, Lachance said OPM would work with them on figuring out the logistics of transferring policies.

People who leave the federal government could retain their insurance, but would make payments directly to the insurance carrier.

Mikulski urged the Senate to bring S. 2420 to the floor by Father's Day, which falls on June 18 this year.