MILITARY UPDATE
Insurance 'open season' may be beneficial to the seriously ill
Military Update focuses on issues affecting pay, benefits and lifestyle of active and retired servicepeople. Its author, Tom Philpott, is a Virginia-based syndicated columnist and freelance writer. He has covered military issues for almost 25 years, including six years as editor of Navy Times. For 17 years he worked as a writer and senior editor for Army Times Publishing Co. Philpott, 50, enlisted in the U.S. Coast Guard in 1973 and served as an information officer from 1974-77.
By Tom Philpott
Active-duty service members, drilling reservists, federal civilian employees or spouses who face serious healthcare challenges should consider applying for the Federal Long Term Care Insurance Program (FLTCIP) before its "open season" closes Jan. 1.
Federal retirees are also eligible for the new insurance. Indeed, most everyone in the federal family can apply anytime. But there is an important advantage in the open season that should not be missed by current federal workers whose families face serious illness, said Frank Titus, acting associate director for retirement and insurance service in the Office of Personnel and Management. OPM administers the new insurance plan.
As of late November, Titus said, OPM had received 104,000 applications for the insurance program. Fewer than 10 — all of them cancer patients — are drawing payments to defray the cost of hospice care or assisted living, nursing home or in-home custodial care. Hospice care is covered by the military health insurance program TRICARE or Medicare, but assisted living, nursing home or in-home custodial care are not.
If applying for FLTCIP before Jan. 1, current employees, including active-duty and drilling reservists, will benefit from "abbreviated underwriting." Employees and service members answer only seven questions about their health; spouses only nine. They aren't asked, for example, if they have cancer, which usually would be disqualifying.
Retirees and their families, on the other hand, face "full underwriting," which means 40 or more health questions, Titus said. Current employees and spouses will face the same after Dec. 31.
"The more you have to disclose," he said, "the more likely it is you are going to raise a flag that may disqualify you from getting a policy."
Physicals aren't required to apply. But depending on information disclosed during full underwriting, statements can be sought from attending physicians and medical records reviewed.
Full details on the new insurance program, including premiums and plan options, are available online or by calling (800) 582-3337.
Of the 104,000 applications received, Titus said, 23 percent are from retired military, their spouses or survivors. Reserve retirees are eligible only if 60 or older and drawing annuities. Only 1.5 percent of applicants — 1,600 people — or their spouses have been active-duty members.
Military interest is low for several reasons, Titus said. They aren't used to offers of benefit upgrades from a program run by OPM. As a group, the military is younger, doesn't have as much disposable income as federal civilians and is less inclined to see a need for long-term care. Many believe mistakenly that long-term care is provided under TRICARE.
"Though TRICARE for Life is a rock-solid program," Titus said, "it is not intended to provide long-term care."
Not everyone will benefit from FLTCIP. The most likely participants, Titus said, are people who have, or expect to have, medium to large estates they want to protect for their heirs rather than eat away buying long-term care. Only when most family assets are gone does long-term care kick in under Medicaid, and with few options on the kind of care provided.
People with serious ailments — cancer, heart or kidney disease, liver disorders, some forms of diabetes — usually do not qualify for long-term care coverage. But current employees do have that chance through Dec. 31.
The reason for abbreviated underwriting, Titus explained, is "We see this as an important benefit — one that helps recruit and retain the kind of work force the nation needs. That objective isn't met if we turn down a large portion of the (current) work force."
The new program is not subsidized by taxpayers; it will operate solely off premiums. Some commercial insurance companies offer similar coverage for even lower premiums, but usually limited to applicants in good health, with good habits.
"You might be able to beat our policy from a price standpoint," Titus said. "But ours is the only policy where you have OPM on your side. ... If our (premium) income exceeds what we need for benefits, we'll improve benefits. If that happens with private insurance, it goes to profit.
"Also, we've got a very strong homecare benefit and care coordination benefit.
"If OPM ever finds out that sponsoring insurance companies are not on your side, OPM will withhold some profit. You've got that kind of consumer-oriented protection with our policy."
Home sale break on hold
The 107th Congress adjourned without passing a tax bill that would have restored to military people and Foreign Service officers the same tax breaks on capital gains from home sales enjoyed by other Americans.
Prospects of passage remain high in the new Congress. Committees with jurisdiction did agree this fall to make the tax breaks retroactive to home sales since May 1997, when they were enhanced for all homeowners except many military and Foreign Service personnel.
These groups can spend lengthy tours away from their principal residence and can't always meet a requirement that, for capital gains protection, they occupy their homes for at least two of the last five years before being sold.
Questions, comments and suggestions are welcome. Write to Military Update, P.O. Box 231111, Centreville, VA 20120-1111, or send e-mail to: milupdate@aol.com.
Correction: A previous version of this column erred in stating that TRICARE and Medicare do not cover hospice care. They do. It was correctly stated that TRICARE and Medicare do not cover assisted living, nursing home or in-home custodial care.
