Whether you are envisioning the current collapse of Black Sea ports, the former crash of SE Asian colonial empires or the stampede of carriers to escape out the door of individual LTCI the mental image of falling dominoes takes no prisoners. I would again apologize in advance for my fixation on the “Cares Fund” social experiment underway in Washington State. After 18 years of writing this column my optimism for good intentions should have long ago floated to the surface, as well as my virulent disdain for bad math or attempts at didactic political program execution. Just so there is no room for any misunderstanding or ambiguity in my humble world view: the WA Cares Fund has managed to reassemble every past false structural concept, dusting off every originally innocent actuarial faux pas and will knowingly (maybe intentionally) create a perpetual inflationary taxpayer supported (some would say cursed) political bureaucracy.

Comparing this contagious political manifestation to a virus lab leak is just too easy. The plague as predicted has now successfully escaped to Pennsylvania and New York State. The quest for easy answers fueled by budgetary priorities and the siren song of new fresh taxpayer coerced social experiment trust fund accounting is apparently as urgent as any other drug addiction. Please bear in mind that all future booster shots for these programs will require rate increases with no possibility of ever leaving these questionable and experimental political institutions for alternate risk options.

Random thoughts for your kind consideration:

  • Combo life sales still leads our sales efforts. Recent production history has been very self explanatory. Prior to the pandemic three of four years showed dramatic growth. The pandemic particularly in 2020 drove the combo sales down 23 percent according to LIMRA. This was primarily fueled by declines in single premium and extension of benefit sales on universal life. CI acceleration riders still constitute two thirds of all sales. I remain skeptical that if you did not charge a current premium that you actually sold anything.
  • As reported last year on a post COVID LIMRA survey, interest in LTCI grew dramatically with an over 50 percent increase in those willing to shop for coverage. Consumer caregiving stress also grew as a result of COVID experience.
  • Beginning in the third quarter 2021 combo sales caught fire with the greatest spiked increase since 2007. Accross all distribution channels and product lines 2021 was a banner year. Apparently this was specifically true as it regards single premium LTCI.
  • Before you get too excited however, this fantastic increase in buying (mostly from the more affluent) is a direct result of the fire sale in Washington State as over 225,000 scrambled to find individual insurance alternatives to the new pending state tax. Another 250,000 looked under the bed to dust off and prove any LTCI coverage citizenship already in place.
  • In the meantime, back at the Virus Farm, Washington Cares Fund is already anticipating rate increases before the program begins as the newly categorically excluded state residents decrease participation expectations in a program already projected to lose money.
  • The WA Cares Fund Workgroup has become fixated on any supplemental private long term care insurance that will inevitably emerge as a result of the mandatory coverage. This, dear readers, is the whole enchilada—if you do not participate in the inclusion of these future ingredients there will never again be an abundance of choice at your favorite Mexican restaurant. Extra refried beans will never again be substituted for the unpopular Chicken Chalupa.

Truthfully, I am never pleased when my paranoia proves to be accurate. However, both New York and Pennsylvania have now joined the WA Cares Fund mandatory program parade. HB 2779 is now the law of the land in the great state of Pennsylvania with NY on the launch pad. Before you get too excited it appears there will not be any allowed anticipatory fire sale. It appears no one will be allowed to escape the new tax. Please begin to organize an image in your mind of a growing list of state Insurance Commissioners gleefully joining a regularly scheduled Zoom meeting to facilitate cloning this—at best flawed—attempt to offset Medicaid budget deficits. And then knowing that any taxpayer imposed structure would, could and should be helped with additional supplemental coverage (in this case an inadequate pool of benefits with a 10 year vesting schedule) moving to police any and all attempts to enhance individual protection around the edges.

I would be the first to recognize I may be wasting my breath, but it must be said loudly and frequently: “Freedom of choice for consumers and insurance professionals is in real jeopardy.” Now fueled by a burning sensation in my subterranean regions that the infamous predator of “taxation without representation” haunts our streets at night. I would ask that you take no pleasure in the fact that this foolishness will only see the light of day in Blue States—an untreated virus remains a self-fulfilling prophecy.

Other than that I have no opinion on the subject.

Ronald R. Hagelman, CLTC, CSA, LTCP, has been a teacher, cattle rancher, agent, brokerage general agent, corporate consultant and home office executive. As a consultant he has created numerous individual and group insurance products.

A nationally recognized motivational speaker, Hagelman has served on the LIMRA, Society of Actuaries, and ILTCI committees. He is past president of the American Association for Long Term Care Insurance and continues to work with LTCI company advisory boards. He remains a contributing “friend” of the SOA LTCI Section Council and the SOA Future of LTCI committee. Hagelman and his partner Barry J. Fisher are principles of Ice Floe Consulting, providing consulting services for Chronic Illness/LTC product development and brokerage distribution strategies.

Hagelman can be reached at Ice Floe Consulting, 156 N. Solms Rd., New Braunfels, TX 78132 Telephone: 830-620-4066. Email: