Frequently Asked Questions

Applying for Coverage Under the Federal Program

Coverage Exclusions

1. The Program denies coverage to people who use a wheelchair. How can this be allowed?
    
2. Can someone with disabilities enroll?
    
3. Why can't all employees enroll in the standard insurance coverage?
    
4. Is there an exclusion for pre-existing conditions?

1. The Program denies coverage to people who use a wheelchair. How can this be allowed?

The Americans with Disabilities Act (ADA) does not prohibit the underwriting of risks by insurance companies. Insurance companies can legally underwrite their coverage to identify people who do not present acceptable risks to be insured. It is not against the law for insurance companies to deny insurance to classes of people with same/similar conditions.

Standard industry practice denies long term care insurance coverage to people in wheelchairs, people who use some other medical devices and/or have certain medical conditions or combinations of conditions. People in these categories have a significantly higher chance of needing long term care services.

Without a government subsidy toward premiums, accepting such risks would increase the price of the insurance considerably, resulting in adverse selection and the eventual demise of the Program.

The Federal Long Term Care Insurance Program does offer an alternative insurance plan to employees, active members of the uniformed services, and their spouses who apply using abbreviated underwriting and are denied the standard insurance; and a service package to everyone denied coverage, including annuitants.

The Long-Term Care Security Act which established the Federal Long Term Care Insurance Program recognized that underwriting would be necessary. The Law states: "Nothing in this chapter shall be considered to require that long-term care insurance coverage be guaranteed to an eligible individual."

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2. Can someone with disabilities enroll?

Anyone in an eligible group can apply for coverage. Of course, there are a range of disabilities and differing levels of severity of medical conditions. So as with all applicants, some people with disabilities or particular medical conditions will have their applications approved and others will not be approved.

As with all other applicants, acceptance or denial of a disabled person's application will depend on whether the person can meet the underwriting requirements . Depending on answers to the underwriting questions, those denied may be offered other options.

Federal/Postal employees, members of the uniformed services and their spouses who are eligible to apply with abbreviated underwriting and who are declined coverage will be offered either an alternative insurance plan and/or a service package. Everyone else who applies with full underwriting and is declined coverage will be offered a service package.

The Federal government has distinguished itself as a leader in recruiting individuals with disabilities. As a result, they have significantly more employees with disabilities than many private sector employers. Without some form of underwriting (questions about health status), we could not offer attractive and affordable long term care insurance.

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3. Why can't all employees enroll in the standard insurance coverage?

All employees who apply will be offered some form of benefit. However, due to health reasons, a small minority will be offered alternative insurance or a service package. These individuals would probably not be able to receive any long term care insurance benefits from the private sector.

Because over 90% of eligible employees have health insurance, the added costs of those in poor health can be spread over many, many others. The percentage of employees who typically purchase long term care insurance is less than five percent. So it wouldn't take many in poor health to drive up the costs (premiums) for the others.

If the Federal Program guaranteed standard insurance to all employees who applied, their insurance carriers would have added the expected costs of those in poor health to the premium. With no Government contribution, many healthier employees who could pass underwriting would find less expensive premiums and purchase coverage elsewhere. The Program would then be left with only those who couldn't purchase private insurance, requiring even higher premiums to cover the risks of those remaining in the Program.

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4. Is there an exclusion for pre-existing conditions?

Pre-existing conditions may prevent you from obtaining the long term care insurance coverage in the first place, but if you qualify for coverage, they won't affect your eligibility for benefits.

You have to pass underwriting to enroll in this insurance (answering health questions, possibly authorizing access to medical records, possibly being interviewed by a registered nurse). If your application is approved, and you become eligible for benefits, it doesn't matter whether a pre-existing condition is the reason you became eligible. You cannot be denied benefits because of a pre-existing condition which you disclosed during the application process.

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