—Reality Of Claims Progression
—Risk Definitions That Are Manageable
—Reform Goals That Are Possible
No need to convince anyone that education and training success is the only transformational course of action that can guarantee an alternate outcome. There is also no question that the wonderful world of long term care planning solutions is in search of an alternate reality. Identifying a clear course of action and proselytizing a solution that compliments current fiscal circumstance seems to be a dominant theme across multiple stakeholders. And not surprisingly that course of action requires lower premiums. Lower premiums can only manifest themselves as a reflection of reduced benefits.
It does disturb me that I must state the obvious. The marketing and to some extent distribution paradigm is not working as we would wish. The frustration is that we know we would all acknowledge that we have drifted into an “elitist” approach. And we all know what is missing. If these product options cannot meet the needs of those who are exposed to a possible catastrophic risk, and affordable insurance options are simply not priced in a competitive environment, we cannot ever expand, or some would suggest return, to our origin—the middle mass market. Why not begin with matching the timing of premium to the true nature of the risk? There is virtually no risk until the early 70s, beginning to hit serious claim curves by the early 80s. I know I’m over simplifying a complicated pricing exercise. But dear readers it is specifically that 15 to 20 year hiatus in substantial claims that has plagued our sales efforts. The only predisposition to buy is sourced at the generational interdependence of American caregiving. Unless you got the claim on you by association or proximity the problem is just too far over the horizon to visualize with any accuracy. All I’m suggesting is that it should not stretch anyone’s credibility if the pattern of premium payment could be more similar to the actual risk. Yes, you will pay more as the potential of a serious claim begins to materialize in real time. However mystery and denial of the risk also lifts like a fog from your understanding of the need.
Everyone cannot afford a catastrophic insurance solution. For those who can, a cornucopia of asset-based solutions await the savvy consumer with eye popping advantages.
Now let’s return to the most frequently pondered basic question: “How much is enough?” If we could just stop here, before we begin to evaluate need or ability to pay, and clearly name and identify the approach. Is your primary goal to replace the great and vast majority of the risk or to provide supplemental income at the point of claim? Both have the same purpose to maintain, perhaps even to suggest, a guarantee that the buyer will be able to manage their own private care—preferably at home.
Just as a frame of reference, the State of Washington recently passed long term care legislation based on an increased payroll tax. You can opt out if you own an individual policy but only if you take action before the new law goes into effect next January. No comment at this point. It’s only the benefit level that it will provide that deserves mention—$36,500 lifetime benefit. The conversation as to where we might eventually provide public assistance on the front or the back of the claim is a debate raging among all stakeholders. For now just let the limited amount provided serve as a measure clearly viewed by some as adequate supplemental protection.
Surely there are few who would disagree that we must reform our vision as to our basic goals. We have left far too many behind. Home and community based services will continue to expand exponentially. We will continue to do what we do best—leverage potential catastrophic risk or provide meaningful supplemental coverage to private or public funding. Suffice it to say that there are currently a number of public assistance strategies in development or pending legislation. They all have one common denominator—they will require our help to succeed.
Keep the Faith!
Other than that I have no opinion on the subject.