The letter has a response deadline and a default – and the default is what happens to you if you do nothing, which is almost never the option you would have chosen. Read the response date first, before the percentage, before the new premium, before anything.
The Federal Long Term Care Insurance Program is sponsored by the U.S. Office of Personnel Management for federal and postal employees, annuitants, active and retired uniformed service members, and certain qualified relatives. It launched in 2002, is offered through a contract with a private carrier, and is administered by a program administrator rather than by OPM directly. Because it is experience-rated group coverage rather than a set of individual contracts, OPM has approved across-the-board premium increases more than once – the 2016 round produced increases that for many enrollees exceeded 80 percent, and OPM announced a further round effective in 2024 with an average reported in the range of roughly 25 to 30 percent. Increases are not uniform: yours depends on your age at enrollment, your benefit period, and above all your inflation option. Confirm your own number against your own letter, and confirm the program’s current status at opm.gov, since OPM suspended new applications in December 2022 and has extended that suspension since.
This page is organized around paper, because the decision is only as good as the documents in front of you. It is education, not advice. Take the numbers to your own financial adviser and confirm program terms with the FLTCIP program administrator at the number printed on your letter.
In This Article
- Document One: The Increase Letter Itself
- Document Two: Your Benefit Booklet and Outline of Coverage
- Document Three: Your Annual Statement and Current Daily Benefit
- Document Four: Your Annuity or Payroll Statement
- Document Five: The Life Insurance You Own Separately
- Document Six: Proof of What You Elected
- Who to Ask, and What Each One Can Actually Answer
- Frequently Asked Questions
Document One: The Increase Letter Itself
Do not skim it. Five things are on it and four of them are easy to miss.
- The response deadline. A specific date. Circle it.
- The default election. What the program will do if you never reply. In past FLTCIP rounds the default has been the full increased premium for some enrollees and an automatic reduction in benefits for others. Which one applies to you is stated in your letter and nowhere else.
- Your current benefit set. Daily benefit amount, benefit period, waiting period, and inflation option, printed as the program has them on file. Check them against your own records; discrepancies are worth a phone call.
- The alternatives offered. Typically some combination of paying the increase, reducing the daily benefit, shortening the benefit period, changing or dropping the inflation option, or accepting a paid-up limited benefit.
- The contact line for the program administrator. Call that number, not a general OPM line, and write down the representative’s name and the date.
Scan the letter the day it arrives. If you elect anything through the online portal, screenshot the confirmation screen. If you mail a form, send it with tracking. Programs of this size lose paper, and the deadline does not care.
Document Two: Your Benefit Booklet and Outline of Coverage
This is the contract document that tells you what you actually own. Three provisions decide most of the arithmetic.
The waiting period. FLTCIP uses a 90-day waiting period before benefits begin, and for facility care that period is counted in calendar days once you are certified as eligible for benefits. That is 90 days of care you fund yourself. At a national semi-private nursing rate in the range of roughly $300 to $360 a day in 2025 cost-of-care surveys, the waiting period alone is a $27,000 to $32,000 exposure. It is the number most enrollees have never calculated.
The benefit trigger. Benefits become payable when a licensed health care practitioner certifies that you need substantial assistance with a set number of activities of daily living for an expected period, or that you require substantial supervision due to severe cognitive impairment. Read the exact wording in your booklet – how an LTC benefit trigger works explains why this clause matters more than the daily benefit amount.
The inflation option. This is the largest single driver of your premium and of your future benefit. Enrollees with automatic compound inflation carry the highest premiums and the largest increases; the alternative structures buy less growth for less money. Dropping inflation protection lowers the premium immediately and permanently reduces what the policy will be worth in 2040. See what inflation protection actually buys before you trade it away.
Also confirm the elimination period mechanics; how elimination periods are counted differs by policy and by care setting, and the difference is worth thousands.
Document Three: Your Annual Statement and Current Daily Benefit
If you have had compound inflation protection for fifteen years, your daily benefit is no longer the number you bought. It has grown, and so has the premium behind it. Pull the most recent annual statement and write down three figures: current daily benefit amount, current maximum lifetime benefit, and current annual premium.
Then do one piece of arithmetic. Divide the current maximum lifetime benefit by the current daily benefit to see how many days of care you have actually bought, and compare that to the median length of a paid long-term care claim. Industry claim studies generally put the average length of a long-term care insurance claim in the range of roughly two to three years, with dementia claims running considerably longer. If your benefit period already exceeds the realistic exposure, shortening it is a legitimate way to absorb the increase without touching the daily benefit that pays the bill each month.
That is the trade almost nobody is shown: shorten the tail rather than cut the daily amount. Ask the program administrator to price both.
| Document | Where It Comes From | The Number to Find | Why It Decides Something |
|---|---|---|---|
| Increase letter | Program administrator | Response deadline and default election | Doing nothing is itself a choice |
| Benefit booklet | Your enrollment file | Waiting period, benefit trigger, inflation option | 90 days of self-funded care is $27,000-$32,000 at 2025 rates |
| Annual statement | Program administrator | Daily benefit, lifetime maximum, current premium | Shows how many days you actually own |
| Annuity or pay statement | OPM or payroll | Every insurance deduction on the check | FEGLI may be the better line to cut |
| Life policy cover page + in-force illustration | Your life carrier | Face amount, premium, sustainability | The only one of these with an asset value |
Document Four: Your Annuity or Payroll Statement
If your FLTCIP premium is deducted from a federal annuity or from pay, the increase changes your net check, and you need to see it against everything else that comes out of that check. Pull the current OPM annuity statement or leave-and-earnings statement and list, in order: federal tax withholding, the Federal Employees Health Benefits premium, the FLTCIP premium, and any Federal Employees’ Group Life Insurance deduction.
That last one is worth its own look. FEGLI Basic and Option B premiums rise steeply with age after retirement, and many retirees are paying substantial amounts for coverage they no longer need while simultaneously being told they cannot afford the LTC increase. If that is your situation, the LTC letter is the wrong document to be optimizing first. Our page on what FEGLI actually costs a retiree lays out the age bands.
Look at the whole check. The right answer is often to reduce a different line rather than the one that just sent you a letter.
Document Five: The Life Insurance You Own Separately
This is where families most often confuse two different things, so be precise.
FLTCIP is not life insurance and has no cash value. There is nothing to sell, nothing to borrow against, and no surrender value. If you drop it, you receive nothing back. That is true of nearly all traditional standalone long-term care coverage, and it is why the drop-it decision is so unforgiving.
A hybrid life and long-term care policy is a different animal. If what you hold is a life policy with a long-term care or chronic illness rider, it does have a death benefit and may have cash value, and the options are entirely different. Check the contract name on the declarations page rather than assuming.
A separate, permanent life insurance policy is a real asset that can fund the higher LTC premium. Pull its cover page, the current annual statement, and request a fresh in-force illustration from the carrier, which is free. Those three documents answer whether the policy is on track to stay in force, what it costs to keep, and what it is worth. If the honest answer is that the life policy is itself unaffordable, what happens when you skip a premium and why premiums jump after 80 explain the mechanics, and how to respond to an LTC premium increase generally covers the parallel decision on private coverage.
Selling a life policy is the wrong answer here when the death benefit is under roughly $100,000, when it is a small final-expense policy, when the insured is in strong health for their age, or when a surviving spouse still needs the coverage – and it is always the wrong answer if the goal is simply to fund one year of a recurring premium, because a lump sum does not solve a recurring cost. If you want an independent read on where a life policy stands, send the cover page for a free, no-obligation review or call (732) 978-9575. Pine Lake Legacy provides education only, does not purchase policies, and does not give legal or tax advice. Start with what a life settlement is and what drives value.
Document Six: Proof of What You Elected
Whatever you decide, the file you keep is what protects you if the election is processed wrong – and elections do get processed wrong in group programs of this size.
Keep: a copy of the completed election form, the tracking receipt or the portal confirmation screenshot with the date visible, a note of the representative’s name and the date of any phone call, the next premium statement showing the new amount actually charged, and a revised benefit summary confirming the daily benefit and benefit period you now have. Check that revised summary against what you elected. If they do not match, call within the same billing cycle, and put the discrepancy in writing.
Set a calendar reminder for the following year’s statement as well. The one thing every enrollee learns from an increase round is that a program that raised rates once can do it again, and the household that already has the paperwork organized makes a much better decision the second time.
Who to Ask, and What Each One Can Actually Answer
The program administrator answers questions about your specific benefits, election options, deadlines, and what the default does. OPM answers questions about the program’s status, eligibility, and whether applications are open. Your State Health Insurance Assistance Program counselor is free and answers Medicare questions, including the common and important point that Medicare does not pay for long-term custodial care. Your state’s Senior Health Insurance program and the state department of insurance handle complaints about how a private long-term care policy was sold or serviced. Your own CPA answers whether premiums for a tax-qualified long-term care contract are deductible in your circumstances, since that depends on age-based limits published annually by the IRS and on whether you itemize.
Nobody at Pine Lake Legacy can answer the tax or eligibility questions for you, and this page does not attempt to. What we can do is look at a life insurance policy you own and tell you plainly what it is worth keeping, reducing, or reviewing – at no cost and with no obligation.
Frequently Asked Questions
What happens if I ignore the increase letter?
Something happens automatically, and it is stated on your letter. In past federal program rounds the default has been the full increased premium for some enrollees and an automatic benefit reduction for others. Neither is chosen with your circumstances in mind. Find the response deadline and the default election before you read anything else.
How large have federal LTC program increases been?
They vary by enrollee and by round. The 2016 round produced increases exceeding 80 percent for many enrollees, and the round effective in 2024 was announced with an average reported in the roughly 25 to 30 percent range. Your own increase depends on age at enrollment, benefit period and inflation option, so use your letter’s number.
Should I drop inflation protection to keep the premium down?
It is the largest lever and the most permanent one. Dropping compound inflation protection lowers today’s premium and permanently reduces what the benefit will be worth decades from now, when you are most likely to claim. Ask the program administrator to price shortening the benefit period as an alternative before you touch inflation.
Can I sell or cash in the long-term care coverage instead?
No. Traditional long-term care insurance, including the federal program, has no cash value and no secondary market. If you drop it you receive nothing. That is different from a hybrid life and long-term care policy, which has a death benefit; check the contract name on your declarations page rather than assuming.
Could I sell a life insurance policy to pay the higher premium?
Sometimes, but be careful about the shape of the problem. A settlement produces a lump sum, and a premium is a recurring cost, so funding one year solves nothing structural. It is generally the wrong answer under roughly $100,000 of death benefit, on small final-expense policies, or when a spouse still needs the coverage.
Are the premiums tax deductible?
Premiums for a tax-qualified long-term care contract can count as a medical expense subject to annual age-based limits published by the IRS, and only if you itemize and clear the medical expense threshold. Whether that helps you specifically is a question for your own CPA, not for a program representative or for this page.
Who do I call about the program itself?
The program administrator at the number printed on your letter handles your benefits, options and deadlines. OPM handles program status and eligibility, including whether new applications are open. Your free State Health Insurance Assistance Program counselor handles Medicare questions, including what Medicare does not cover in long-term care.
Find out what your policy is worth — free, confidential, no obligation.
A 15-minute educational review covers your eligibility, every alternative, and a realistic view of what each path would net you.
Related Reading
- Ltc Policy Premium Increase
- Premium Increase After Age 80
- Skip A Premium Consequences
- What Is An Ltc Inflation Protection Rider
- What Is An Ltc Insurance Elimination Period
- What Is An Ltc Benefit Trigger
- Fegli Retiree Premiums
- What Is A Life Settlement
- How Much Is My Policy Worth
Pine Lake Legacy does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.