Happy Campers

    The inexorable march of boomer demographics exacerbated by trillions in unfunded social liabilities, rapidly expanding rolls of older family members needing care, and a known potential catastrophic risk severely underinsured keeps the LTC insurance sales conundrum on the boil.

    Make no mistake: The fuel, the accelerant that burns with increasing intensity, is the growing financial implication of caregiving in a rapidly aging population. Perhaps the pressure point that may best illuminate our future is the impact of difficult financial times on caregiving practices.

    According to the National Alliance of Caregiving (NAC), America’s 44 million family caregivers are the backbone of our long term care health care system, providing a current economic value of $375 billion annually. In a previous study by the NAC called “Family Caregivers. What They Spend, What They Sacrifice,” November 2007, half of caregivers spent 10 percent of their own income, $5,531 per year, to help with the expenses, and 34 percent had dipped into their own savings to help. A new survey by Evercare, a care coordination company, and the NAC explores the implications of the recession on the nation’s growing army of personal care providers. The survey was designed to measure the effect of the recession on caregivers and their recipients.

    We continue to see the effects of caregiving on caregivers in terms of stress and health related issues. This equation has also had dramatic effects at work. In the Evercare/NAC survey, 50 percent of working caregivers said they were less comfortable taking time off from work to provide care, one third reported the necessity of working more hours or taking on additional jobs, and 43 percent have lost income as a result of cutbacks in working hours or layoffs.

    Bottom line: Our difficult financial times have made matters even worse for America’s caregivers. Of those reporting difficulty, 60 percent reported having to spend more of their own money to help, and two thirds said they were saving less for retirement.

    All the above creates an absolutely clear picture of increased stress and stress is directly responsible for jeopardizing the health of the caregiver. They are also concerned about their ability to continue to provide care for their loved ones with 50 percent reporting that the economic downturn has increased their worries.

    The burden of caregiving can be relentless both economically and emotionally. Recent economic realities have certainly not helped. The good news is that in spite of the additional adversity, 66 percent reported that the quality of care provided has not been diminished, even though 21 percent of those caregivers surveyed reported that they had to move in with their care recipients. The obvious begs the question, policies in place would have helped.

    Here is the last statistic from this survey which demands our attention: 64 percent were employed. This leads us directly to another annually updated survey on worksite benefits from MetLife. The “Eighth Annual Study of Employee Benefit Trends: 2010.”

    Employee benefits have remained “resilient” even in the face of an ongoing recession. Employee productivity seems to be a primary focus of benefit selection strategy. Programs which foster health and wellness as well as financial security support productivity goals. Surprisingly, employees feel optimistic about the future and are making an effort to improve their financial deficiencies and reduce personal debt. For instance, it is no secret that more people than ever before have been seeking out assistance from National Debt Relief and other debt consolidation companies looking for ways to improve their finances.

    Employers’ number one concern is to control benefit costs, followed by the traditional desire to attract and retain the best employees, with employee productivity coming in a strong third.

    When taken in combination, the concerns of the employers and employees polled in the survey would suggest that voluntary benefit programs contribute greatly to accomplishing all three goals. Employees do value their benefits and recognize their value as a financial safety net. It was also pointed out that there is a price to pay when employers reduce benefits. This consistently creates an immediate decline in employee job satisfaction.

    Benefit satisfaction is actually at an all-time high. More importantly there is a very strong relationship between benefit satisfaction and job satisfaction. In addition, financial security was directly related to loyalty, which is obviously good for employee retention. The bottom line is that difficult economic times have spotlighted the vulnerability of retirement plans. It seems logical to suggest that strategic planning to create as well as maintain assets and income at retirement requires the necessity of LTC insurance protection to guarantee those objectives.

    What jumps off the survey is the optimism and confidence in future success both for employees and employers. I am just one of many eternal optimists, even when faced with the most trying economic times since the Great Depression. I am just another soldier in an army of happy campers.

    Maybe Americans are the world’s original happy campers. Maybe our only real job is to shield and insulate those happy campers from a known unavoidable adversity. I am again on the road in my RV this summer speaking to agents across this beautiful land, and I see many happy campers smiling and waving as I pass. But, more importantly, I see hope and determination!

    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: ron@icefloeconsulting.com.