Paranoid Ramblings

When it comes to some of the important stuff, we just don’t seem to pay sufficient attention to the critical details. It’s not that we are intentionally allowing some issues or concerns to be swept under the carpet. There are a few however that continue to haunt the back streets of my slowly fading mind. If you haven’t noticed, this column is a form of therapy for an aging curmudgeon that has tried to loudly applaud any and every forward motion to protect more Americans. There has also been an enthusiastic attempt to expose and question market directions that may not have proven to be helpful.

During a recent social dinner conversation I was given my favorite opportunity to answer questions about the necessity of doing something, frankly anything, to blunt the effects of a long term care event. As would be expected, the interested consumer began with his knowledge that there had been an overall industry retreat from thIs genre of insurance options. It became immediately apparent that explaining the overused and abused infamous seven percent market penetration statistic would have to be where we began. The truth is our history has become a burden, not a blessing. This is perhaps our most misunderstood statistic as it refers to the total population. Again I had to begin with a standard defense explaining that those with very limited assets and income would need to look to government support and those with more than sufficient assets and income would be able to pay their own way. We have clearly done a much better job over the last 25 years of identifying and helping those in between these financial extremes, therefore exposing the most exposed financial weakness with the most to lose.

Perhaps it would be best to begin with a much wider lens. First I would ask you to google “LTC Market Size” both U.S. and global:

  • According to the Congressional Budget Office the cost of long term care in America was 30 billion in 2000 and 215 billion in 2015, compounding at 15 percent per year.
  • The size of the market for long term care services was 490.6 billion in 2022 and 517 billion in 2023.
  • CAGR is projected to boom forward at a compounding of over six percent through 2030.

Covid deaths dramatically shifted the service market away from facility solutions with an all out assault on better answers for quality care at home. According to recent consumer research from Grand View, the home care market was valued at 142.9 billion in 2022 with an expected CAGR of 7.46 percent between 2023 and 2030. Technology is playing a major role in this market expansion. The stampede to HHC may be driven by the continuing increase in mortality. Successful management of a care claim is best defined by the number of contacts between the caregiver and the care recipient. Artificial Intelligence soon to be arriving on the wings of the next Zoom call. We are learning that more chronic care situations have become “manageable.” Care may begin in a hospital but it then fans out everywhere. This market (our market) will continue to grow rapidly. The current care service industry is having serious staffing problems. Assisted Living by definition is the perfect laboratory for experimentation with expanding technology support.

The bottom line is that patterns in our thinking need to be revised. We have done a much better job than our public persona might suggest. Clearly there is widespread growth of the care support industry and finding creative ways to finance that growth remains our game on our field.

Claims adjudication needs to become our new poster child for action and investment of time and resources. Out of sight and out of mind has become an inevitable result of an industry that automatically profits from time delay. To put a fine point on it, every day of delay is one day closer to when the claim ends. Acceptance of the validity of days of counted and approved elimination days should not look like a concertina fence. This can easily turn into an adversarial relationship. In my humble opinion there are simply too many minor opportunities to delay or deny a claim from bad documentation, vague policy definitions, facility or caregiver credentials, ADL approval and intentional excess paperwork. All I can say here is that the personal injury attorneys appear to be feeding happily on winning punitive damages for acts of “bad faith.”

The background financial rationalization market opportunity is bigger than ever. Unfortunately those sometimes five-fold past rate increases have also been gifted to our field force to wear like the Scarlet Letter “A.” The temptation of current claim management to delay payment may continue to lurk in the shadows and a sales history not well served by any of the above is simply not helpful.

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: