There is indeed a major storm brewing just off shore. A financial and emotional conflagration of enormous proportions. A tsunami of claims that will be attributed to our perpetually discussed, most famous, favorite potential insurance and asset protection sales prospects, the beloved boomers. They have come full circle. They are on the verge of turning 80+ in mass. All those involved in the struggle to build fire walls around personal wealth for the last 30 years know or suspect the truth about our condition of readiness. We are simply unprepared, understaffed, uninsured, underinsured, unavailable and most importantly unaware that when the inevitable hits the shore our claim management first line of defense may be swept offshore.
We all need a new mental image to remind us of the reality of a new world where the primary focus is rapidly shifting from sales to claims. Perhaps the classic image of a snake eating its tail could be tattooed on our chests. The boomers who 20 to 30 years ago were standing around a claim fire watching their parents and loved ones, witnessed the struggle for a footing in the quest for quality care. Those who were at that time witnesses understood not just the need for care but the need for quality individually personalized care. Time has passed, inflation has done its damage, innocently ill-conceived pricing assumptions have been exposed, and perhaps most importantly the seismic shift from facility institutional confinement to enhanced, managed and monitored home care.
The parameters of the problem should be fixed permanently in your mind. We have over 7 million insureds and my guess would be that less than 10% of those standalone LTCI health policies were purchased in the last 10 years. I would also suspect that over 90% of those policies on the books are actually in closed blocks. Regardless of how well originally underwritten, these large reserves of money established for future claims will to some degree be subject to the forces of a classic rate spiral situation perhaps impacting the longevity of those reserves. l would also suspect the overwhelming majority have survived substantial rate increases as well as the relocation of their policy administration from the home office that sold them the policy to a claim management TPA.
Perhaps the two most important considerations at this time in our market’s history are our reliance on the mandatory diligence of those contracted administrators to prevent fraud, and that all concerned remain vigilant in our efforts to ensure timely and fair administration of those claims. Billions of dollars of reserves are currently in place for those with the foresight to have leveraged that expense with insurance dollars. On the other end of the financial spectrum, discounted funding primarily from Medicaid will ultimately provide some level of basic care.
Let’s establish some goal posts for subsequent columns beginning by trying to sort out the confusion surrounding some of the terminology at play in the marketplace.
- That “claim process” and “clam management” are only marginally related.
- A “family” caregiver is often simply just a euphemism for free care.
- A “carer” can be any person. When the time comes what we will all be looking for is a “caring carer.”
What you will all need is direct experienced claim management for family and heirs. Your own exclusive personalized claim ombudsman and personal claim advocate. Someone trained to coordinate with an already established financial plan. Someone with the time tested knowledge to coordinate all the moving parts of an effective and efficient claim management process.
Frankly you need someone who takes a comprehensive approach to the problem providing needed support to all the family members involved.
Forgive me for stepping briefly out of the politically neutral line. My unsolicited but heart felt personal recommendation for just such an organization is AMADA Senior Care that for 28 years has specialized in working with and consistently helping those of us of the insurance persuasion and has been successfully delivering the very benefits outlined above.
Other than that I have no opinion on the subject.
