As a former history major there is no quotation more famous or has filled up more college exam blue books than the quote from the Harvard historian George Santayana: “Those who cannot remember the past are condemned to repeat it.” At the very least it is fair to say that insurance strategy attempts to reduce the financial and emotional price associated with long term custodial risk are now at a point of reflection. I would never suggest we completely failed, only that we never achieved the centrifugal force necessary to adequately establish insurance alternatives to current defaults of personal or governmental funding as we all would have anticipated.

Please understand I am not opposed to collective fairness helping to maintain equity of access, affordability, and quality of outcomes. I do have some difficulty visualizing prior success stories where we have defaulted to mandatory bureaucratic solutions.

  • The Social Security Trust Fund by 2035 will only be able to pay 75 percent of scheduled benefits.
  • Medicare Part A reserves are predicted to be depleted by 2026. Covid accounting may move this up as early as next year.
  • ACA/ObamaCare–The interdependence, some might suggest incestuous relationship, of these Trust dollars with Medicare make solvency predictions difficult. History would suggest you should have suspicions as to the solidity of the financial and political ground upon which this newest social insurance rests.

Now the traditional reservations of intentionally avoiding personally held convictions concerning politics or religion must come into play. Unfortunately, the politics of this market cannot be avoided. Long term care financial risk may be the one issue that transcends yet focuses the usual liberal/conservative polarities. What cannot be avoided entirely is the political, social and cultural context of a nation truly divided. Prospective state by state solutions to the long term care conundrum do follow a suspiciously red vs blue state pattern. Currently California, New York, Alaska, Colorado, Hawaii, Oregon, Illinois, Michigan, Minnesota, North Carolina and Utah are actively considering establishing a new long term care social insurance program paid for by a combination of employee or employer payroll taxes similar to the Washington State Cares Act pending implementation July 1, 2023. As an example, the California Department of Insurance has been charged by the legislature to present a plan for consideration by January 1, 2024. This pot is on the boil primarily in blue states. Mandatory government control required by these plans would of course not find succor among more fiscally conservative approaches evidenced in clearly red states.

I do not wish to drift too far off here into the politically charged health insurance world. I would however remind us that we have all been operating under marching orders created by HIPAA’s proclamation that long term care insurance is health insurance. You must allow yourself to continue to internalize the reality that this “truth” lies at the radioactive nucleus of any and all attempts to ameliorate the long term care risk.

Under the previous administration there was a serious attempt to create an alternative to the ACA. The former president commissioned the Department of Labor to create new expanded and dramatically flexible revisions to the creation and constitution of AHPs (association health plans) under existing ERISA provisions. This would have allowed employers to more easily band together and provide viable alternatives to the coercive nature of Obama Care. These liberalizations of current law would have allowed states to organize alternatives to federal mandates. In the fading days of the previous administration this attempt at greater freedom was stopped in a Washington DC federal court. That decision has been appealed by a laundry list of red states. We are all still waiting for the Court to rule or political winds to change direction .

This war of political thought and competing perceptions of human behavior lies at the heart of any solution to our united and universal desire to soften the blow of long term care.

History will not repeat itself, we will never go back to what was. We will stagger forward. We can and will do better. However I would humbly submit it will not be based on a compromise of these two divergent proposed futures. It will be one or the other.

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.