LTC Bullet:  LTCi Contradictions 

Friday, June 9, 2006 


LTC Comment:  Dueling data on LTC insurance point in opposite directions for the market's prospects.  Details after the ***news.*** 

*** JOIN THE DONOR-ZONE WITHOUT THE $150 FEE UP-FRONT.  Did you know you can now donate as little as $12.50 per month (automatically on your credit card) and qualify immediately for the Center for Long-Term Care Financing's Members-Only web zone AND for our one-a-day mental vitamins (LTC E-Alerts and LTC Bullets)?  Please make a new or supplemental contribution now at .  Don't feel limited to the minimum if you can afford and feel moved to contribute more.  Your support is much needed and greatly appreciated.  Please direct any questions regarding our Members-Only Zone or donating online or by check to Damon at 206-283-7036 or ***

*** THE BRAVE NEW WORLD OF LONG-TERM CARE.  The Deficit Reduction Act of 2005 changed the ground rules for LTC financing.  Medicaid will no longer be a tax-payer financed fall-back for affluent people who fail to save, invest or insure for long-term care.  That means the public should plan and prepare for LTC as they never have before.  But nothing will change unless states implement the DRA, the feds enforce it, the media publicize it and the private sector sells alternatives to Medicaid like insurance and reverse mortgages.  How well do you and your colleagues understand this critical law and the new marketing opportunities it opens?  Bring in Center President Steve Moses to present his exciting educational/motivational program on the DRA:  what is it, what does it mean, and how should you present it to maximize LTCi and reverse mortgage volume.

The Center for Long-Term Care Reform usually charges a flat fee of $5,000 for Steve's programs.  But getting the word out about the DRA is so important that we're reducing that cost to $3,000 plus expenses for a limited time.  What's more, if he will be in your area anyway, you can bring him in to speak to producers or consumers for only $1,000 plus expenses.  Here's where Steve is scheduled to be in the next few months: 

Seattle:  most of the time
Dallas:  last week of June
Kansas:  mid-July
New Mexico:  late August
Phoenix:  late September
San Antonio:  second week of October
San Diego:  third week of October
Florida:  fourth week of October
Austin, TX:  second week of November 

Contact Steve at 206-283-7036 or to schedule a program. *** 

*** SPICE UP YOUR NEXT MEETING with a nationally recognized speaker known for his perceptiveness and passion on long-term care issues.  Center for Long-Term Care Reform President Steve Moses speaks across the country at conferences in the fields of gerontology, law, accountancy, financial planning, LTC service delivery, and insurance.  That can get expensive, but Steve can "appear" by speaker phone or conference call at your next Board, sales, staff or any other meeting to educate and motivate your group.  All you need to do is contribute a negotiated amount (as low as $150 for a 15 minute appearance) based on the duration of the call to the Center for Long-Term Care Reform.  Contact Damon at 206-283-7036 or to schedule a time. *** 



LTC Comment:  LIMRA ("a worldwide association of insurance and financial services companies," according to its website) says in its first-quarter 2006 review of individual LTC insurance sales:  

"Following three years of decline, the sale of individual long-term care insurance (LTCI) has yet to show signs of recovery.  . . . [I]ndividual LTCI sales continued its downward trend during first quarter 2006, declining 10 percent based on annualized new premium.  Over 72,000 individuals purchased LTCI during the three-month period . . ., 14 percent fewer than had purchased the coverage during the same period in 2005." 

Pretty gloomy, but then comes this from Claritas (a marketing information resources company, according to its website):   

"As the Baby Boomer generation continues its grinding march toward senior citizenship, sales of insurance products associated with aging, such as long term care (LTC) insurance, are also keeping pace, according to a recent analysis of data from the Claritas Insurance CLOUT(tm) database.  The database houses current-year estimates and five-year projections of product usage and demand for insurance products and services.  The analysis estimated that within the next five years the number of U.S. households that own LTC insurance will increase from 16.5 percent to nearly 18 percent, and in the Washington, D.C. Designated Market Area (DMA), which is projected to be the most active market during this time, the number goes even higher - to 21 percent."  (Claritas Press Release, May 30, 2006 at

Is there any way to reconcile the LIMRA findings with the Claritas projections?  How do you account for the low and seemingly ever-declining sales of long-term care insurance?  Comments are welcome.  Just click "reply," and fire away.  We'll compile and report the best observations we receive. 

Here's our "two cents" worth: 

According to the LIMRA report:  "With a low market penetration rate, the LTCI industry should focus on its major competition — 'consumers’ ignorance, apathy, and denial' surrounding the need for long-term care planning." 

But blaming poor sales on the alleged stupidity of your customers is rarely a winning formula for the future.  A wiser approach would be to ask "Why are consumers ignorant, apathetic and in denial about the need for LTC planning?" 

Could it possibly have something to do with the fact that government pays for the vast majority of all professional long-term care services in the United States and that most Americans can ignore the risk of long-term care, avoid the premiums for private insurance, protect most of their wealth and shift the cost of LTC to Medicaid or Medicare if the need ever arises? 

Denial is the problem all right.  But it is not the recalcitrant customers' denial or ignorance that obstructs a growing LTCi market.  It is rather the industry's evasion of one simple truth:  the government is giving away what the LTCi industry is trying to sell and has been for over 40 years.