Long-Term Leaders

Last week, Sen. Gordon Smith, R-Ore., introduced a bill that would provide tax incentives to people who save for long-term care -- assistance with the basic tasks of life such as bathing, dressing and preparing meals.

As the platform for his announcement, Smith, who chairs the Senate's Special Committee on Aging, held a hearing on the issue, during which he sought an Office of Personnel Management official's advice. Long-term care, Smith said, is becoming a bigger burden on the already expensive Medicare and Medicaid programs.

"We must begin to educate the public about the importance of planning for long-term care to ensure future generations of retiring Americans are able to meet their health care needs," Smith said.

Smith turned to Robert Danbeck, associate director of human resources products and services at OPM, to explain the workings of long-term care insurance.

Danbeck spoke on behalf of the Federal Long Term Care Insurance Program, the largest such program in the country, with more than 210,000 enrollees as of the end of February. Congress created the program in 2000 and federal employees can sign up anytime. But the biggest challenge, Danbeck said, is convincing employees to do so.

As Smith put it, "I suppose there is in all of us a sense that we will never die and why bother with an extra insurance policy because of that."

"Long-term care insurance is typically a difficult sell, whether in the government or private sector," Danbeck said. "I personally would rather pay for long-term care insurance and never need it, than find that I need it but don't have it."

Committee members asked Danbeck to explain how the government convinced 200,000 federal employees to sign up.

"It is very hard for people to project themselves into the future," Danbeck said. "And [to] imagine they may need help with activities often taken for granted, such as eating and dressing."

OPM employs one creative method to prompt such projection. Retirees who don't own long-term care policies receive birthday cards with a friendly reminder about the potential impending need for nursing home care: Happy Birthday, but next year's might not be.

Another tactic OPM used from the start was federal endorsement. Although the insurance is provided by Long Term Care Partners, a joint venture formed by John Hancock and MetLife, OPM retains sponsorship and endorsement of the program. A single, government-supported plan, which stands in direct contrast to the multitudes of regular health insurance policies offered to federal employees, simplifies decision-making.

"Sometimes it's hard to compare benefits or know that you're comparing them accurately," Danbeck said. "The federal endorsement itself is sometimes enough to give applicants the peace of mind they've made the right choice."

Employees interested in the federal program can print out an application and fax it to 800-632-3892.

A useful source of information is the Shopper's Guide to Long-Term Care Insurance, put out by the National Association of Insurance Commissioners.