LTC Bullet: On the Lack of True Marketing of Long-Term Care Insurance

Tuesday, May 6, 2003

Las Vegas, NV--

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LTC Comment: The National Long Term Care Forum is an excellent annual training and networking conference for long-term care insurance agents and brokers. See for details. The Forum is meeting this week in Las Vegas. Today's opening session is titled "Why There Is a Lack of True LTC Marketing and What You Need To Do About It." Presenters include Stephen Moses, President, Center for LTC Financing; Harley Gordon, President, Corporation for LTC Certification; Joseph Pulitano, President, Advanced Resources Marketing; and John P. Quigley, CLTC, Vice President, LTC Marketing, Avon LTC Leaders. Challenging the presenters is a panel of publishers including Sharon A. Chace, Editor, Broker World Magazine; Kathleen McGrath, Editor, Knowledge Digest; and Lyle Gary, Editor, Insurance Marketing Magazine. What follows is Steve Moses's essay summarizing his contribution to the event.

"On the Lack of True Marketing of Long-Term Care Insurance," by Stephen A. Moses

Lured by promising demographics, dozens of long-term care insurance carriers, hundreds of brokers, and thousands of agents have tried to sell long-term care insurance only to give up and exit the market. Most of those who continue to sell the product are less than thrilled by the return on their investment. Yet, the insurance industry continues to ignore the primary reason for the market's disappointing results: the government has been giving away their product since 1965. Even with full above-the-line tax deductibility--the public policy basket into which insurers have put all their eggs--most people won't buy long-term care insurance if they can ignore the risk, avoid the premiums and get the government to pay. That's exactly what happens most of the time. Without LTCI, people routinely end up in a nursing home on Medicaid.

But Medicaid is a means-tested, public assistance program, i.e. welfare. It has a dismal reputation for problems of access, quality, reimbursement, discrimination and institutional bias. Even though Medicaid planners can rejigger people's income and assets to qualify them for publicly financed care, the risk their clients run is that they will be trapped in a seedy nursing home under-financed by a collapsing, virtually bankrupt welfare program. To some middle-class people, it may also matter that the Medicaid bed they may occupy could cause a poor person, who lacks "key money" to buy into a better nursing home, to end up in one of the 100 percent Medicaid hell-holes.

Instead of focusing primarily on asset protection, long-term care insurance marketers should emphasize access to quality care in the private marketplace at the most appropriate level, i.e. home care, assisted living, and the very best nursing home care as a last resort. Independence, control and choice are the most important values added by long-term care insurance and they should be the benefits with which agents lead, return and finish.

It won't suffice, however, simply to point out the negatives of Medicaid and the positives of private insurance. Most people are in denial about long-term care risk and cost. What agents need to understand is how prospects can be in denial when the risk and cost is so high. The reason is that more than four out of five dollars spent on nursing home and home health care in the United States come from sources other that people's assets. With assets not at risk, most people are desensitized to the likelihood of needing long-term care. They don't know who pays for long-term care, but they figure someone must. And they're right!

That's why the primary key to increasing long-term care insurance sales is not marketing. LTC agents have to be AMGs--altruistic, masochistic geniuses--to sell something the government has been giving away for nearly 40 years. Like the Marines, LTCI agents are expected to do the difficult immediately and the impossible over time. Long-term care insurance marketing will take off, and regular folks will be able to make decent livings selling the product, when and if the government starts targeting publicly financed LTC benefits to the genuinely needy and encouraging private insurance and home equity conversion through above-the-line tax deductibility and other incentives.

*** Stephen A. Moses is president of the Center for Long-Term Care Financing in Seattle, WA. Reach him at or 206-283-7036. Or visit The Center for Long-Term Care Financing is a charitable, nonprofit think tank and public policy organization with the mission of ensuring quality long-term care for all Americans. Subscribe to the Center's free (for the first three months) online newsletter "LTC Bullets" by emailing your request to . Attend the Center's full-day "LTC Graduate Seminar." ***