I commend anyone for looking into this important coverage however, because of the numerous differences between the Federal Plan and individual LTC plans and I would not recommend the Fed policy to anyone that is healthy enough to qualify with an individual policy. The Fed Plan only makes sense for those people in poor health that do not have the option of applying with an individual plan.

One of the biggest problems with the Federal LTC Plan is the fact it reduces home care coverage by 25%. Thus, if your Policy included a nursing home benefit of $200/day and the Fed Plan would only cover you for $150/day for home care. This would leave you paying $50/day or $18,250 per year and out of your own pocket for home care. Individual plans cover you for the FULL $200/day and at any location. If you selected the 5% compound inflation option (which doubles your coverage every 14.3 years) you'd be left paying $36,500 out of your own pocket for home care, with the Fed Plan and at the time your coverage doubles. Keep in mind, most people receive care in their own homes and most people want to stay in their own homes and at the time they START receiving care. I know I don't want to go to a nursing home and especially if I'm able to stay in the comfort of my own home.

Another big issue with the Fed Plan is the fact it includes a Catastrophic Coverage Clause. This clause allows them to reduction your coverage if the number of claims becomes too severe. This clause, that is not included with individual plans and shows that the Federal Plan insures a much unhealthier pool of insured's. Individual plans actually decline approximately 25% of people who apply and due to medical reasons. If you are declined after applying with an individual plan and then you can apply with the Fed Plan. This Catastrophic Coverage Clause never states how many claims is considered too many. Also, the Fed Plan is written by John Hancock, the #1 writer of individual plans. John Hancock formed a separate LLC for the Fed Plan when they agreed to write this policy. John Hancock did this so that any future rate increases by the Federal Plans and would not affect their individual policyholders.

The Federal Plan also forces a person to use an agency caregiver after the 1st year of care. Thus and if you need care for three years, you would have to switch from the independent caregiver that you know and trust, after the 12th month and use an agency caregiver that is a complete stranger and is much more expensive. The agency itself is a middleman. Thus and they are out to make a profit. They could be charging your policy $30-$40 per day and just for assigning a caregiver to you. An independent caregiver may charge you $18 an hour to clean your house and prepare your dinner, where the agency caregiver may charge you $30 an hour and for the same work. Thus and your policy with the Fed Plan is used up much quicker when you are forced to use an agency caregiver.

These are the main drawbacks to choosing the Federal LTC Plan over an individual plan. There are several other benefits that are excluded with the Fed Plan and as well. However, the differences listed in this article alone could leave you paying hundreds of thousands of $ ' s, out of your own pocket and with the Fed Plan.