Yin And Yang

Photo by Alex Padurariu on Unsplash

Insurance professionals have historically been relegated to the category of arm-chair philosophers. We are frequently casual yet persistent students of human nature. Our mantra has never changed.

“Be prepared for life’s adversities.” And therefore quite simply: “Plan and care ahead!”

We take it as an article of faith that human circumstance can be altered, amended, managed or tempered. We awake each day with heartfelt certainty that we can help build a better future. However experience has forced this jaded columnist to admit that there are human conditions for which there is no known cure—stupidity and greed top that list. In graduate school my studies were focused on the pedagogical art of communicating the truth at the core of history and politics. In my humble opinion there are really only two varieties of human personalities—those with a democratic or those with an authoritarian behavior predisposition.

Our world has many very serious problems from increasing apparent global warming to a reawakening of the real possibility of a global nuclear conflagration. Ignoring these catastrophic concerns is not an option. The future approach to the amelioration of the inevitable cost of custodial care has in many ways at least made it to the top ten concerns most in need of societal justice. Apparently the conversation has bifurcated projecting solutions into an all too familiar dichotomy. Those approaches which emphasize freedom of choice, flexible customized benefits and personal responsibility are under attack. These “individual prerogative” options are increasingly facing a potential strong head wind powered by government controlled barren budget offsets requiring mandatory public behavior acquiesce.

At a time when the world seems to be standing by with its hands in its pockets, I simply do not want the ongoing quest for long term care protection to suffer from its own form of impotence. Let’s throw some more logs on the fire that should be growing in your mind:

  • The location of the physical reality of the problem has shifted. Both facility and home care outcomes have been forever altered by the pandemic. According to the American Heath Care Association and the National Center for Assisted Living the entire facility care industry is operating at a 4.8 percent negative margin, meaning that up to 40 percent of those residents are living in a facility that is at risk.
  • The SOA Research Institute recently concluded an updated company survey “COVID-19 Impact on Long Term Care Insurance Report.” Higher mortality was reported for both active (6.4 percent) and disabled lives (10 percent). A significant (11.3 percent) reduction in claims incidence was observed with a dramatic shift in the status of claims moving to the home. Little change in lapse rates was reported.
  • The AARP surveyed its membership in Washington State on their perceptions of the WA Cares Fund. fifty-one percent said they supported the program. Remember 400,000 tried to buy a policy to get out before it was too late. Forgive me for suggesting that the survey questions were not surprisingly self-serving. Eighty percent liked there was no pre-x, 76 percent liked that they could pay family members, 73 percent liked the fact that the cost arrived on a unisex basis, 70 percent said they liked that they only had to pay while working, and 70 percent liked the fact that it was cheaper than long term care insurance.

Look, I get it. The siren’s song of relief to a state budget item that remains an open wound is mesmerizing. A new state run trust fund where claims are initially delayed must appear as a marvelous fiscal magic trick. Easy answers to complex anxiety. Hard to resist. Other states will follow.

Just please keep your powder dry.

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.