If you’ve been waiting for the Federal Long Term Care Insurance Program to re-open to new enrollees, it looks like you will have to wait two more years.

The Federal Long Term Care Insurance Program (FLTCIP) has historically been an affordable option for federal employees and military retirees. The FLTCIP provides insurance to help cover the cost of care when help is needed with activities of daily living. FLTCIP was suspended to new enrollees back in December of 2022. It was anticipated that the suspension would be lifted at the end of 2024.

The Office of Personnel Management (OPM) announced on November 13, 2024, that the program suspension will be extended through December 2026. The program suspension is a result of ongoing increases in long-term care costs and a decreasing number of insurance providers in the long-term insurance market.  This is not a surprise as the long-term care insurance market in the United States has been declining since 2012. Fewer insurance companies are selling long term care policies. Premiums are increasing exponentially resulting in fewer new enrollees. Premiums are also increasing for existing policy holders. In most cases you can keep your existing benefits but for an increased cost. Insurers are offering more hybrid policies that combine life insurance with long-term care. Consumers, faced with decades or years of premiums, have recognized that long term care insurance may not be an affordable solution. Especially, when those premiums increase unexpectedly. Experts from public and private sectors are beginning to acknowledge that private long-term care insurance is poorly suited to address modern long-term care needs.

If you were waiting for FLTCIP to resume accepting new enrollees, it may be time to explore other options. Hybrid policies can present a viable alternative. These policies combine life insurance and long-term care insurance providing benefits in two ways. If you pass away during the policy term, your beneficiaries will receive the death benefit of the policy. If you need long-term care during the term of the policy, the death benefit can be used to pay for expenses. Hybrid policies can offer features that make them more appealing than stand-alone long-term care insurance. For one, you are guaranteed to get some kind of benefit from the policy, whether you need care or not. Hybrid policies also offer flexible premium options.

Many people worry about how they will pay for care as they head into retirement and their later years. Insurance is one method for addressing this future unknown expense. Health insurance and Medicare do not cover the cost of long-term care or assistance with activities of daily living. There are a number of other strategies for planning for late-in-life care needs. Each person’s financial situation is different. It is important to work with your financial advisor to understand your situation, your needs, and your options. From there you can work together to create a strategy that meets your goals. The most important thing is to make a plan before you need the care.

Clear Insight Wealth Management is Here to Help:

Dealing with medical insurance is never an enjoyable time. At Clear Insight Wealth Management, we’re dedicated to helping military and federal families make the best choices for a secure and fulfilling life. This includes helping our clients make the most out of their earned benefits. Our mission is to empower you to live your dream life, and we’re here to turn financial challenges into success stories.

To schedule a “Get to Know You” meeting, call (509) 904-4956, email adrienne@myciwm.com, or schedule online.