Sen. Mark Warner, D-Va., added his concerns to the mix of discontented voices following the rate spike from Federal Long Term Care Insurance Program.
Warner sent a letter to acting Office of Personnel Management Director Beth Cobert on Aug. 1, asking for more information detailing why premiums would rise as high as 126 percent this year, and why there wasn't more competition for the contract.
Related: Read the letter
The insurance program—which offers long-term care for beneficiaries with chronic illness, disability or are in need of elder care—announced last month that premiums would jump an average of 83 percent following new claims projections from the contract holder John Hancock.
Those projections estimated that policyholders would retain coverage longer and, due to high health care costs, require higher premiums to cover a potential shortfall.
But the plan is also supposed to offset projected costs with actuarial investments, which should temper some of the rate increase. The FLTCIP program contract, which is negotiated every seven years, has now seen two consecutive cycles of premium increases, with a 25 percent hike in 2009.
OPM approves both the actuarial projections and the premium rate increases before they go into effect. The agency said in a statement last week that it became aware of a possible shortfall in June 2014 and that John Hancock and policy administrator Long Term Care Partners review their projections every six months and report them to the agency.
"The forecasting and projecting of future claims experience on long-term care insurance policies is complex and requires the insurer to make predictions about claims usage and investment returns for decades into the future using the best available information at the time," the statement said.
The senator requested information about how OPM conducted oversight of the actuarial estimates and what steps it took to mitigate the investment risk.
“In fact, a 2011 GAO report raised a series of issues about the oversight of the program, including concerns about program design that limited competition for the contract and its actuarial assumptions,” Warner said in the letter. “I am deeply concerned about OPM’s oversight and stewardship of the program, and respectfully request your response to the following questions.”
Warner’s letter follows a separate request from Rep. Gerry Connolly, D-Va., and Rep. Don Beyer, D-Va., for information about the program.
The National Active and Retired Federal Employee Association sought congressional hearings on the FLTCIP rate hikes on Aug. 1, also sending the letters to the House Committee on Oversight and Government Reform, the Senate Committee on Homeland Security and Governmental Affairs and the Senate Special Committee on Aging.
“Nearly 264,000 federal employees will face an average 83 percent premium increase, an estimated $111 per month,” said NARFE president Richard Thissen in the letter. “This situation has many NARFE members stunned and outraged.”
Policyholders will have until Sept. 30 to decide whether to pay the higher rates, reduce their coverage to lower costs or drop the policy completely.