Federal Long Term Care Insurance Program (FLTCIP) – 86% Premium Increase

Picture of Brennan Rhule, CFP®, ChFEBC℠, AIF®

Brennan Rhule, CFP®, ChFEBC℠, AIF®


On September 11th, enrollees in FLTCIP have been sent letters that their premiums will be increasing in 2024. Enrollees have the option to accept the premium increase or reduce coverage to maintain an equivalent premium. We have heard that premiums are increasing as high as 86% for some enrollees. OPM has not announced the figures publicly, but we have heard from enrollees that premium hikes range from 49% up to 86%.


OPM must reassess the contract with John Hancock every 7 years. From OPM, “Recent analysis of the program’s actual and projected experience concludes that a premium rate increase is needed. The current FLTCIP premiums are not sufficient to meet future projected obligations.”


This comes as no surprise as we have seen a history of premium hikes each time the 7-year contract has ended. Historically, premiums have increased severely each time the 7-year contract was up for renewal.  In 2016, premium rates rose 83% on average, and as high as 126%. In 2009, premiums rates increased on average 17%, and as high as 25%.


The U.S. Office of Personnel Management (OPM) suspended applications for coverage under the Federal Long Term Care Insurance Program (FLTCIP) effective December 19, 2022. OPM has suspended applications for coverage so that John Hancock has time to assess the current premium amounts related to benefits coverage. The suspension will remain in effect for 24 months, unless OPM issues a subsequent notice to end or extend the suspension period.


It is no secret that John Hancock is struggling to maintain the long-term care program and must increase premiums as a result. There has been a recent surge of competitors entering the long-term care market which FLTCIP has been unable to compete with. Costs for home care, assisted living, and nursing homes are increasing much higher than inflation which is also squeezing the viability of the FLTCIP program.


If you are a FLTCIP enrollee, be prepared for a premium hike every 7 years going into the future.  

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