Forest Firestorms

Firestorms in the Pacific Northwest (Payroll deduction mandates) have blanketed our nation in smoke. Climate change (and COVID-19) reality have become the new buzz words for a clear understanding that we cannot go back. If there is an opportunity to change our future the reform must be profound and acknowledged as incremental and based on what we have learned from the conflagration. In recent conversations with knowledgeable cohorts in the struggle to at least bend the curve of long term care planning I have agreed to confirm my membership in the “Eternal Optimist Fraternal Association.” However there are some important caveats:

  • Lack of meaningful success in reducing the risk exposure of America’s baby boomers and the continued lack of a viable plan to acknowledge and confront cosmic deficit caregiving contingencies must now finally fall squarely across the paths of both public and private attempts to ameliorate the sure and certain knowledge that we as a nation are totally unprepared. Politicians have failed. Political accommodations built on revenue neutrality have failed. Academics, focus groups, think tanks and, yes, consultants have failed. The insurance industry as a whole has failed. Commitments to education and training have failed. The opportunity for those most at risk to find respite from the brewing storm has failed. Consumers continue to insist on misunderstanding the risk or the real cost of addressing that risk.

There is also a short list of those who have not failed :

  • The long term care specialists who never surrendered when support for their efforts began to fall away from them in all directions. The group brokerage community that continues to scramble to find product to deliver at the worksite. Those wholesale brokerage distribution institutions that have only turned around long enough to ask for more ammunition and simply keep firing with dwindling reserves and no real hope of overrunning the enemy wearing away at its flanks.
  • The Actuarial Community—those magical alchemists who were never provided with adequate primal ingredients. They did the best with what they were given. The job was always bigger than advertised and corporate enthusiasm for the work was never overwhelming.

Why we have continued to ignore the nose on our face has always amazed me. The model for what must be an obvious compromise between government mandates and private insurance solutions is certainly the intimate and successful marriage between Medicare and supplemental options to maintain personal responsibility, participate in the risk and reduce consumer cost to manageable levels. Guaranteeing an adequate level of program participation and therefore allowing affordable “gap” insurance, I would humbly submit, may have been the blueprint for reform all along.

Now there is smoke and there is fire. Evacuation orders to retreat to a new line of defense are drawn and pending. Please stay alert! Major structural changes are imminent; the landscape left after the fires burn out will not be the same. None of these smoldering fires or burning blazes are under control as this goes to press:

  • The pending WISH ACT is a classic stop-loss approach. Basically after a floating one to five year elimination period cash would be provided on a means tested basis eliminating catastrophic risks for those in the program. Funded by employer and employee tax sharing. I do have some difficulty seeing the government as a caring reinsurer.
  • $400 billion is still on the table in Washington for caregiving enhancements, Medicaid expansion and “Infrastructure” semantics. Although removed from bipartisan legislation it is alive and well in reconciliation debates.
  • Finally, the absolute confusion and potential for expansion of what is certainly a wildfire in Washington State is very concerning. A mandate of participation based on increased employee taxes is very problematic.

At this point, I am simply asking that you pay attention. The “conversations” are not necessarily bad ones but without your voices they could all go easily astray. Just so we are absolutely clear—the only voices I completely trust are those that read this column. These fires will leave a mark. I will do my best to keep you informed and forewarned.

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: