The Office of Personnel Management suspected as early as January 2005 that it might have to increase premiums for a long-term care insurance option that previously had been advertised as featuring no premium increases.

Yet OPM did not tell current enrollees that their premiums could increase. And thousands of enrollees in the automatic compound inflation option remained unaware until May, when the agency announced hefty premium increases of up to 25 percent as part of a new contract with John Hancock Life and Health Insurance Co.

The only action OPM took at the time was to discontinue a brochure that said the automatic compound inflation option would have no premium increases, deputy associate director Dan Green told a joint Senate panel Oct. 14.

The brochure "was too simplistic," Green said. "I'm not saying it wasn't true, but it wasn't complete. It wasn't accurate. It wasn't up to our standards."

Senators from the Special Committee on Aging and the Homeland Security and Governmental Affairs subcommittee on oversight of government management, the federal workforce and the District of Columbia said they were outraged, and said OPM and John Hancock should find some way to compensate the 155,000 enrollees facing large premium increases.

"Heads should roll over this," said Sen. George LeMieux, R-Fla. "This is a huge mistake."

Sens. Paul Kirk, D-Mass., and Roland Burris, D-Ill., said OPM and John Hancock should grandfather current enrollees in at their current premium rates and benefit levels.

Green said OPM is handcuffed by its requirements to fund long-term care benefits out of premiums paid by enrollees, and doesn't have the authority to recompense enrollees. But Green said OPM would work with the committees to find some solution.

Enrollees officially have until Dec. 14 to choose whether they will accept the premium increase or lower their benefits to keep their current premiums, but John Hancock said it will accept changes for an unspecified period after that deadline. Colleen Kelley, president of the National Treasury Employees Union, said that the official deadline needs to be extended because many enrollees will think they have to choose by Dec. 14.

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