fers retirement classes, federal government retirement seminars

Long-Term Care Planning Has Changed Drastically—Especially With FLTCIP Still Frozen for New Enrollees

Missy E
November 14, 2025

Key Takeaways

Long-term care planning for government employees in 2025 is more uncertain than ever due to the ongoing freeze of the Federal Long Term Care Insurance Program (FLTCIP).
Without access to FLTCIP for new enrollees, you may need to reevaluate your options through other risk mitigation strategies, such as savings, annuities, or health savings accounts.

Long-Term Care Has Become a More Pressing Concern in 2025

The conversation around long-term care (LTC) is changing rapidly. As lifespans increase and healthcare needs become more complex, more government employees and retirees are realizing that traditional retirement benefits don’t adequately prepare them for extended care needs.

In 2025, the long-standing FLTCIP remains suspended for new applicants—a policy freeze that began in late 2022. With the program still unavailable, many are left questioning how to prepare for the substantial financial and logistical demands of long-term care.

What Is Long-Term Care and Why Does It Matter?

Long-term care encompasses a range of services that assist people with chronic illnesses, disabilities, or other conditions that limit their ability to care for themselves. This includes help with activities such as bathing, dressing, eating, and medication management. These services may be provided at home, in assisted living facilities, or in nursing homes.

What makes long-term care planning critical is that traditional health insurance, Medicare, and even FEHB do not typically cover extended custodial care. That leaves a coverage gap that you must actively plan to fill.

FLTCIP Freeze: A Timeline of Events

The Federal Long Term Care Insurance Program (FLTCIP) was established in 2002 to offer affordable long-term care coverage to federal employees, retirees, and their families. But rising claim costs and market instability led to major premium hikes and, eventually, the program’s suspension.

December 2022: The Office of Personnel Management (OPM) placed a two-year enrollment suspension on FLTCIP, prohibiting all new applications.
2023–2024: During this period, only existing FLTCIP policyholders could maintain coverage. No new enrollees were permitted.
June 2025: The freeze remains in effect. OPM has not yet announced any timeline for reopening enrollment or revising plan terms.

This continued pause leaves a large group of eligible individuals without a viable federal long-term care insurance option.

What You’re Missing Without FLTCIP Access

With FLTCIP unavailable, you lose access to a group insurance program specifically designed for the unique demographics and employment history of public sector workers. Some of the key features that made FLTCIP attractive include:

Pooled risk across a large group
Generally lower rates compared to private standalone policies
Benefits tailored to public service retirees and their families
Portability into retirement

The absence of this program in 2025 leaves a vacuum that retirees and pre-retirees must now address.

Current Long-Term Care Costs Are Steep

While you may have counted on FLTCIP to cover a portion of your care costs in retirement, the reality of today’s market demands a proactive financial plan. Here’s what you’re likely facing in 2025:

Home health aide (40 hours/week): National average exceeds $60,000 annually
Assisted living facility: Ranges between $55,000 and $70,000 per year
Nursing home care (private room): Often over $110,000 annually

These figures do not reflect one-time needs—they represent ongoing care that may last for several years. That’s why proper planning is essential.

Alternatives You Should Be Considering

If FLTCIP is no longer an option, what can you do? There’s no one-size-fits-all solution, but several financial tools and strategies can help mitigate the risk.

1. Self-Funding Through Retirement Accounts

Many government retirees rely on the Thrift Savings Plan (TSP), pensions, and other investments. If you’re planning to self-fund care, you’ll need to earmark a portion of your retirement savings specifically for this purpose.

Consider the following:

Allocate a portion of your TSP to low-risk or liquid options for potential LTC needs.
Revisit your withdrawal strategy to include potential long-term care costs beginning in your late 70s or early 80s.
Maintain a diversified portfolio that can weather inflationary pressures in care costs.

2. Using a Health Savings Account (HSA)

If you’re enrolled in a high-deductible health plan (HDHP) and have a Health Savings Account (HSA), it can be one of the most tax-efficient ways to save for long-term care expenses.

In 2025:

Contributions are tax-deductible
Growth is tax-free
Withdrawals for qualified medical expenses (including LTC) are also tax-free

Keep in mind, once you enroll in Medicare, you can no longer contribute to an HSA—but you can still use the funds for qualified LTC expenses.

3. Life Insurance with LTC Riders

Some insurance policies include long-term care riders that allow you to access a portion of your death benefit while you’re alive to pay for care. While these options are not new, their popularity has increased significantly in the absence of FLTCIP.

Important considerations include:

Policy underwriting criteria
Age and health restrictions
Potential reduction in overall death benefit

These plans vary widely in terms and eligibility, so work closely with a licensed agent who understands both life and LTC planning.

4. Annuities with Long-Term Care Benefits

Annuities that include long-term care provisions are gaining attention in 2025. These hybrid contracts often double or triple the payout value if used for qualified long-term care expenses.

Pros:

Predictable income stream
Some plans waive surrender charges if used for LTC

Cons:

Initial cost may be high
Not all annuities include inflation protection

As with all LTC alternatives, read the fine print and consult a professional.

What If You Delay Planning?

Procrastinating on long-term care planning is one of the costliest mistakes you can make. Here’s why:

Premiums increase with age. Waiting until your late 60s or 70s can make private coverage unaffordable.
Health conditions matter. If you develop chronic illnesses or cognitive decline, you may be ineligible for any form of private coverage.
Medicaid has limitations. While Medicaid covers long-term care for those with limited income and assets, it requires you to spend down most of your resources to qualify. This may mean losing control over your care choices.

Planning early gives you more control, more choices, and better financial outcomes.

Legislative Pressure and Future Possibilities

There is increasing awareness in 2025 of the growing demand for accessible long-term care solutions, especially within the public sector. Federal lawmakers and OPM are under pressure to:

Reevaluate the structure and affordability of FLTCIP
Offer new LTC benefit models through federal employment
Explore public-private partnerships for future LTC insurance programs

While nothing has been formally introduced yet, it’s likely that the next few years will bring changes to how long-term care coverage is offered to government employees and retirees. But until then, you need to act with the tools currently available.

How to Protect Your Future Without FLTCIP

If you’re a government employee or retiree in 2025, your long-term care planning landscape has shifted. The absence of FLTCIP as an enrollment option means you must:

Review your retirement income sources
Explore non-insurance solutions like HSAs, annuities, or life insurance riders
Talk to a licensed agent about your risk exposure and protection strategies

This is not an issue to defer. The cost of inaction could ultimately be far greater than the cost of preparing.

Stay in Control of Your Long-Term Care Plan

As healthcare needs grow with age, your ability to choose where and how you receive care depends on your preparation. Without FLTCIP available in 2025, the responsibility falls squarely on you to develop a sustainable, flexible strategy.

Don’t wait for policy changes to dictate your options. Take steps now by reaching out to a licensed agent listed on this website who can help you build a long-term care plan tailored to your needs and resources.