According to the National Retirement Risk Index: “52 percent of households are ‘at risk’ of not having enough to maintain their living standards in retirement.” When you bombard this fragility with caregiving costs, substantial emotional and financial suffering awaits far too many Americans. None of this is taking place in a vacuum. The conversations concerning acknowledging the reality of the risk are proliferating. I don’t think any of us have ever witnessed such an overwhelming need juxtaposed with a wasteland of adequate response. My mind remains unable to grasp the dimensions of the sales opportunity in contrast to our on-going struggle to find sufficient troop strength, effective ammunition or carrier support to fight the battle. To compound the disarray we seem to have become order takers once again, not asking the hard questions or taking the time, effort and energy to shine a light on the obvious. This can happen to you and there is no greater threat to maintaining you and your family’s lifestyle. And why are we continually being forced to round up professional insurance strays to help abrogate chronic illness risk?
Markets are reviving. Corporate long term care planning conversations emphasizing premium deductibility and enhancement of selective benefits for the most eligible for incentive compensation are once again threatening the complacency of rigid HR departments. Competitive accelerated modal premiums are again available. (Ten–Pay and Single Pay). Conversations concerning possible corporate tax avoidance strategies utilizing an IRC Section 105 Medical Reimbursement Plan for stand alone LTCI or an IRC Section 162 Controlled Executive Bonus Plan utilizing combo life both providing the opportunity for “golden handcuffs” for key employees, juicy incentive compensation and corporate premium deductibility.
We do indeed live in strange times. Although stand-alone LTCI may exhibit shrinking availability, alternatives to address America’s caregiving risk are continuing to proliferate. Pricing has stabilized on traditional products and the potential for onerous rate increases on new business has decreased dramatically. We have been herding cats for so long it may be difficult to see that finally many of them seem to be lining up and at least focusing their interest in the same direction. The “Initial Recommendations to Improve the Financing of Long Term Care” report from the Bipartisan Policy Center begins with the painful truth that “the demand for LTSS will more than double over the next 35 years and is fiscally unsustainable.” It is clear the government understands and anticipates a strong role for private insurance. It is also clear there is developing advocacy for some form of additional safety net program for the middle class.
It is however the work of the SOA sponsored Think Tank on the Future of Long Term Care Insurance that may hold the greatest predictive value at this time. In the most recent report from Maddock Douglas, Inc., “Exploring The Possibilities For Helping The American Public Manage The Financial Burden Of Long Term Care,” the following areas were thoughtfully evaluated by the experts in the Think Tank:
• Helping people pay for their care differently.
• Making care more accessible.
• Reduce the cost of care.
• Mitigating the cost of care in the first place.
The final concepts developed by the participants coalesced around three “Platforms of Influence”:
1. Data-Driven Decision Support. The effort here would be to focus on caregiver education and managing current information so that care recipients can be informed as to best practices in terms of care coordination to improve pricing and future recommendations. The object here is to continue to explore new ways of coordinating data collection. Examples being explored here are creating a ‘Health Longevity APP” and a consumer “Care Portal.”
2. Service Evolution and Expansion. The purpose here would be to more efficiently distribute available care to match needs, improve access to quality care and delay the need for care in the first place. Examples of development in this category would be “Uberfication” of care delivery services and rebuilding LTCI policies to look more like traditional health insurance for better consumer understanding and transparency.
3. Paying for Care (“Pay-fors”). This development initiative directly addresses how long term care costs are funded. This includes partnerships and or potential legislation that should be considered. Examples being explored are developing additional qualified dollars through a “Flex 401(k)” which would create a new multi-purpose savings account, or establishing a new “family long term care account” designed to provide tax privileges on a cumulative and progressive benefit basis for all family members.
Regardless of the direction from which you may have observed the progression and evolution of this market, you would have intrinsically known that the risk and the commensurate opportunity to be helpful are immutable. Although it has been frequently frustrating and strategically disappointing that our past sales success has never really met our expectations. What must be acknowledged from the wandering concepts in this market is that pricing is sounder, claims are clearer, technology will remain an accelerant, chronic illness product proliferation will continue to expand and this industry will continue to be hell bent on resolving the conundrum of aberrant feline behavior.
Other than that I have no opinion on the subject.
