Bullet: LTC Grab Bag
Tuesday, June 27, 2006
LTC Comment: Today's
LTC Bullet ties up some loose ends with reader's comments on recent Bullets.
After the ***news.***
*** TODAY'S LTC BULLET is sponsored by Claude Thau,
a Master General Agent who helps LTCi producers nationwide. Claude is the lead author of Tillinghast Broker World
Individual and Group LTCi Surveys.
His mentoring skills help you build whichever market suits you
best (individuals, executive carve-out, multi-life, affinity, financial
institutions, referrals from other professionals, etc.).
As a Long-Term Care Partnership-promoter in many capacities,
Claude may be able to help your state implement a Partnership
effectively. Test Claude by calling 800-999-3026, x2241 to discuss
opportunities or email firstname.lastname@example.org
NATIONAL LTCI PRODUCERS SUMMIT, organized by the American Association
for Long-Term Care Insurance (AALTCI), will be held November 5-7, 2006
in Austin, Texas. The
complete Summit program is now posted on the AALTCI Website (click here:
Special discounts are still available for first-time attendees.
Steve Moses says "I'll be there to speak about the Brave New
World of Long-Term Care since the Deficit Reduction Act of 2005."
STEVE MOSES will be in the Washington, DC area from Monday, July 10 to
Thursday, July 13. If you
can schedule Steve to speak to your group in MD, VA, or DC during that
period, the Center for Long-Term Care Reform will discount the cost of
the program to $1,000 from the usual $5,000 flat fee.
Ask about our "Brave New World of LTC"
educational/motivational program covering why the Deficit Reduction Act
should wake up the public to the need for long-term care planning.
Contact Steve Moses directly at 206-283-7036 or email@example.com.
*** SPEAKING OF THE DRA, we received this note from
Center supporter and LTCi producer Teresa Eagan of Long-Term Care
in Indianapolis, IN: "Since the DRA was signed, we have been contacted by
a few elderlaw attorneys who have now purchased LTC insurance for
themselves (and their spouses) and who say they are planning to actively
recommend the purchase of LTCI to their clients.
We even have one attorneys' office (husband & wife) who have
inquired about becoming LTCI agents.
So, maybe we're winning some battles!"
Hear, hear! ***
LTC BULLET: LTC
LTC Comment: Our
LTC Bullets titled "LTC Contradictions" and "LTCI
Contradictions Resolved?" (check them out on the LTC Blog at www.centerltc.com
or in The Zone) elicited this comment from Jennifer Douglas of LIMRA
enjoyed reading the results of [the Center's] recent poll that compared
LIMRA's Individual Long-Term Care Insurance Sales survey with Claritas'
survey of Americans regarding LTCI ownership.
Although I found your readers' responses very interesting, I
don't necessarily agree with the premise that our results
"contradict" each other.
In fact, LIMRA consumer research has also found that an
inordinate number of Americans believe they are "insured" for
the LTC risk. For example,
in a 2001 LIMRA survey of Americans, 25 percent of retirees and 20
percent of pre-retirees said they own LTCI. As you know, there is much confusion among consumers about
what Medicare will pay for and many have an entitlement mentality when
it comes to social programs. This
speaks to what a LIMRA member has identified as LTC insurers' biggest
competition, not each other, but Americans "ignorance, apathy, and
collection of sales data (individual and group) are insurer reported.
Our studies are perceived to be the closest the industry has to
empirical data on the sale of LTCI in the U.S. in a timely manner.
As with all LIMRA benchmarking studies, the LTCI sales surveys
are for the benefit of LIMRA members.
To that avail, "telling it like it is" by reporting
good and/or bad news is the value LIMRA provides our membership.
Furthermore, members can be assured that the integrity of the
data is taken very seriously as is our analysis.
As such, LIMRA will not imply that industry sales are up when the
data proves otherwise. Nor
will we embellish the implication of individual carrier growth if
evidence suggests that the growth is not organic or is simply due to the
fact that a carrier had poor sales the prior year or is a recent entrant
with a small base.
and foremost, LIMRA members want to know if industry sales are "up
or down." In this
case, it seems only appropriate that the elephant, the fact that the
negative sales trend for individual LTCI continued through first quarter
2006, be the first item addressed in the individual LTCI summary report. However, when our summary report came across your desk, I
hope you had an opportunity to read the entire report. [We did not.] It
seems a bit ironic that the tone of this report is being questioned [by
one commenter], while in the very same report, I encouraged my audience
of insurers to focus on delivering its own message of positive news
about our industry.
all the coming chatter certain to reach more Americans than ever before,
the industry's voice must influence consumers and the media not with the
industry's past, but with both the emotional and financial impact of
receiving benefits from LTCI coverage. That's a powerful message."
one of your readers noted, we have seen growth in the group LTCI market,
which represented 18 percent of new LTCI premium in 2005. LIMRA's Group Long-Term Care Insurance Sales survey reported
that the compound annual growth rate for employer-sponsored sales was 17
percent for the 10-year period from 1995 to 2005.
And, although there are fewer Americans buying LTCI in recent
years overall, LIMRA agrees that the number who own LTCI is indeed
growing. As LTCI is a
relatively young product, coupled with its high persistency, the number
of policies in force has increased each year despite a negative trend in
our sales surveys report on the recent past, other LIMRA research looks
ahead. In fact, we're
currently surveying individuals in the LTCI industry about their outlook
and predictions for the future of LTCI.
This will provide us with a good sense of what the industry
believes the future has in store for LTCI.
again for giving me this opportunity to respond.
Comment: Likewise, Martin
McBirney's LTC Bullet article last week titled "LTCI: A Different Approach" elicited some interesting replies.
(Center members with access to The Zone can read McBirney's
article at http://www.centerltc.com/members/ltcbullets/639.htm)
No more people will buy this guy's
"product" than are buying today's.
Fewer in fact as I think it smacks of gatekeepers and limited
Today's sluggish sales rate is not a
"product" problem. It's
a planning problem. Or said
another way, we've failed by focusing on product instead of planning.
As you've [i.e., the Center for Long-Term Care
Reform] long argued, real income, assets and lifestyle must be at risk
before American's will take the required personal responsibility. We're moving that way legislatively, but it's not a quick
Frankly, today's products are not the problem.
And I'm so sick of the "complexity" complaint.
At its core today's LTCi product is amazingly simple and
identical to all other forms of risk insurance:
You get money when something happens.
LTCi will NEVER be simplified. It can't be done beyond a certain point. (Mr.
McBirney's idea actually seems more complicated.)
It is a complex, multi-faceted risk and claim where the policies
must be nimble enough to cover a broad continuum of care.
The BEST simplification which is already in the market is cash
benefit indemnity that simply pays the benefit once you need care.
No receipts, no definition of provider or limitations as to who,
where or how often. But
this flexibility/simplicity comes at a price.
Too few advisors are selling the problem and the
consequences to people BEFORE they recognize the need.
(That's called "selling.")
Helping people buy a product after they've had negative medical
reports or have just put mom in a nursing home is not selling, it's
taking orders. Those
low-hanging apples have been picked.
We actually now have to get out the ladder, carry it to the
orchard, put it up in the tree and climb.
You know, some LTCi training programs encourage
agents to ignore people who've never had personal experience with LTC
because "it's too hard a sale."
So I guess that means we should not advise a 45-year-old to start
saving aggressively for a 30-year retirement if no one in his family has
ever lived beyond 70? Should
we bother selling life insurance to 30-something parents who've never
had experience with a person who died young?
The issue is the real advisors, those that a
majority of Americans listen to - the great life agents, P&C agents,
financial planners, CPAs and attorneys - are not only not recommending
LTCi, they are not even addressing the risk of care and the need to
develop a plan for care integrated with other retirement and estate
plans and the resources needed to pay for care.
Heck, I don't care if they don't like LTCi or ever
recommend it. But they're
also not addressing what's at risk either.
Once you understand the risk and consequences to a financial
portfolio and a family's lifestyle you have to take some planning
action. This is how LTCi should (and will be) sold.
By the way, this is how life insurance, retirement
and estate plans are sold.
And am I to believe that LTCi is more complex than
managing a broadly diversified portfolio of stocks, bonds, mutual funds
etc.? Is it more complex
than an estate plan that includes charitable remainder trusts, life
estates, irrevocable life insurance trusts, special needs trusts, etc.?
Thanks for keeping the dialog fresh, active and
Comfort, CSA, CLTC, Comfort Assurance Group, St. Louis, MO
enjoyed [Martin McBirney's] piece in the LTC Bullet. On the first part, one might say the [LTCI] industry has been
attempting to purvey soy burger by selling the sizzle not the steak, and
now that the sizzle (bells & whistles) has lost its savor, consumers
are asking "where's the beef?"
the second part, it strikes me that one of the challenges to the
implementation of a preventive, disease management model is the
bifurcation of care between acute healthcare and long term care.
Medical "treatment" coverage has been the province of
traditional health insurance and Medicare (or Medicaid).
With the exception of rehabilitation, LTC is focused on
addressing the disabling consequences of medical conditions; that is, it
focuses on dealing with the results more than the cause.
Even in [McBirney's] example of ADRD [Alzheimer's Disease and
Related Disorders], where the line might be most blurred, doctor visits,
diagnosis, . . . and treatment, say with prescription medication, would
generally be in the current reimbursement province of the health
insurance companies. If LTC
insurers begin to cover these things, do they become health insurers in
the eyes of the regulators? What
about potential double billing or duplicating coverage (a big no-no for
seniors)? The intrusion into traditional health insurance is even
greater for preventive or remedial actions for stroke and peripheral
arterial disease, and now there is new technology coming on line which
could revolutionize the treatment of osteoarthritis.
there is the generalized industry aversion to really providing much in
the way of coverage for "preventive" care.
The concern seems to be about paying for "preventive"
interventions when that which is being "prevented" might not
have happened anyway. And
what is included in the definition of "prevention?"
It seems to me that even HMOs, whose very name betrays their
originating concept of health "maintenance," including
prevention, today tend to provide very restricted benefits for wellness
checks or preventive care.
would take a cosmic realignment of regulators, legislators, Medicare and
the broad healthcare insurance industry. (Which is not to say it
shouldn't be done, just that a lot of vested and special interests are
involved which will make it difficult at the very least.)
it be that the remaining LTCI players are gambling (shrewdly or
foolishly) that the more involved consumers you reference will seek out
and take advantage of emerging preventive treatment options on their own
time and own dime, allowing the insurers to receive the windfall that
such actions will provide as claims are delayed or eliminated?
always, [McBirney is] articulate and thought provoking . . ..
Dale Larson, former president of LTC, Inc. and the Larson Long-Term Care Group, Woodinville, WA