Why can 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
