LTC Bullet:  Buy or Wait?

Friday, May 2, 2014


LTC Comment:  ObamaCare has launched; Vermont is moving toward a single-payer health care system; surely long-term care is next.  So why buy LTCI?  After the ***news.***

*** THREE WAYS to stay professionally abreast of LTC news, trends and data:  (1) Our “clipping service,” (2) LTC E-Alerts, (3) LTC Bullets.  The Alerts and Bullets come to you once a week on Mondays and Fridays respectively.  Our clippings arrive in your email inbox at an average rate of three per day.  Individual Center members ($150 per year) automatically receive Alerts and Bullets.  Premium ($250) and Premium Elite ($500) members also receive the clippings.  Corporate members can provide our Center benefits to their staff and producers at various levels.  Check out the Center for Long-Term Care Reform’s “Membership Levels and Benefits” here.  If you belong to the Center already, please encourage others to join.  If you’re not yet a member, join and encourage your company to sign up as a corporate member.  Contact Damon at 206-283-7036 or for details. ***


LTC Comment:  Bob Vandy, Marketing VP for Center-corporate-member New York & National Long-Term Care Brokers, contacted me the other day.  He said one of their agents has a prospect for LTC insurance who is reluctant to buy.  After all, Vermont is moving forward with a single-payer health care system over the next three years and maybe long-term care will be included.  Perhaps you’ve encountered similar procrastinators.

I had a look at Vermont’s 2012-2014 “Strategic Plan for Health Reform.”  The sum of the state’s proposal for long-term care is this:  “Implement specific efforts to better manage care for Vermonters with one or more chronic conditions.”  The only specific action proposed under that heading is to coordinate Medicare and Medicaid revenue sources.  Such a plan doesn’t exactly instill confidence in anyone who understands the current state of LTC services and financing.

But people will cling to any excuse to avoid responsible long-term care planning.  The federal and state governments provide such excuses in abundance.  Politicians promise new and larger benefits; they rarely campaign on taking anything away.  Nowadays, LTC Commissions, study groups, and think tanks are adding to the public’s false sense of security by suggesting a new policy consensus is forming.  With so many smart people agreeing that “something has to be done,” surely something will be done.  Right?

Don’t hold your breath.  We’re much more likely to see the current Rube Goldberg, publicly financed LTC non-system collapse than to find a workable new government-based plan implemented.  The Center for Long-Term Care Reform’s latest three state-level studies provided the evidence.  Check them out here (Virginia), here (Georgia) and here (New Jersey).  In each of those reports, we showed why the national LTC system and each state’s system is unlikely to survive. 

We summarized our results in “LTC Bullet:  Can Long-Term Care Survive?”  In a nutshell:

Factor #1:  America faces a crushing challenge of aging demographics.

Factor #2:  Longer life spans mean more, if not necessarily longer, morbidity.

Factor #3:  The principal LTC payer today, Medicaid, is already over-burdened and inadequate, yet ObamaCare is loading it with millions more recipients.

Factor #4:  Federal revenue streams that support state Medicaid programs are dubious due to national debt ($17.5 trillion) and unfunded entitlement liabilities ($66.1 trillion).

Factor #5:  State revenue streams that support Medicaid programs are vulnerable due to poor economies caused by over spending, excessive taxation and anti-business policies.

Factor #6:  Public financing of long-term care has crowded out most of the private financing alternatives that could have helped including LTC insurance and home equity conversion, but also asset spend down and estate recovery which Medicaid does not strongly enforce.

Factor #7:  Government has given so much to so many for so long that a new “entitlement mentality” has replaced Americans’ traditional commitment to personal responsibility. 

We concretized, measured and evaluated these factors in the three studies mentioned above.  In any one of the three, you’ll find our “Index of Long-Term Care Vulnerability.”  Try applying it to your state and see what conclusion you reach.  Show it to any prospect reluctant to plan for long-term care because they think government will have to “do something.”