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The LTC Insurance Industry Is Not Waiting For Godot

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In Samuel Beckett’s famous existential play, “Waiting for Godot,” the characters eagerly anticipate and alternatively despair for the all-important but always elusive “Godot” to arrive.

For those of us who have been toiling in the field of long term care insurance for its more than two decades of evolution, life sometimes can feel like the industry is waiting for Godot.

It has been waiting for consumers, in particular the baby boomers, to “wake up” to the financial dilemma of long term care and the advantages of planning ahead. It has been waiting for comprehensive federal legislative initiatives, like an above-the-line tax deduction, to provide what industry leaders believe will be a major boost to the market. It has been waiting for employers to more aggressively embrace long term care as a voluntary benefit and take a sustaining interest in employee education and promotion.

But unlike the characters in Beckett’s play, who do nothing but talk about how wonderful life will be if only Godot would come or complain because they have to wait, industry professionals can feel good about the inventiveness, advocacy and determination with which the industry has pursued initiatives to move its products and business along their evolution.

There have been both successes and disappointments from this struggle. For example, in 1996, the LTC insurance industry attained much sought after tax clarification. But while the somewhat limited tax advantages of LTC insurance provided some new talking points, they did not have the hoped-for impact on sales.

Earlier in that decade, companies greatly expanded coverage (e.g., providing meaningful home care and other alternatives to institutional care) and redesigned products based on objective benefit triggers.

As a result, these improved products helped the industry increase consumer confidence, market appeal and subsequently sales. These changes also provided many insurers in the industry with more financially sound and successful products.

But important changes still needed to be made in the areas of rate stability and risk management; the business has been tackling those, as well.

Those changes came, however, at a rough time in the economy when a significant downturn challenged both product pricing and consumer affordability. While the end result will once again be greater consumer confidence in the industry’s products, the business is still working through and recovering from the bumps and shocks of that transition.

LTC professionals can be proud of being in an industry that is uniting and focusing on key initiatives to help move consumer awareness and product demand.

While there is still hope for and interest in aggressive initiatives like an above-the-line tax deduction, the industry is focusing on more attainable initiatives. These are initiatives that show promise to boost sales and that have a more realistic chance of moving forward in the complicated political and financial dance of the federal budget.

The National Partnership legislation is one example. While there are still differences of perspective of how and whether this initiative will boost the industry, insurers have come together to support it.

Another example is the recent White House Conference on Aging. Here, industry has worked hard to educate lawmakers on the importance of consumer awareness and education, incentives, and the critical role that private insurance can play in the public sector funding crises for health care and aging services.

Advocacy focused on a broader government voice in raising awareness seems well placed, given what has worked in the past to help boost sales. For example, the Federal Long Term Care Insurance Program helped to send a message to public employers and employees that reinforced the value of private LTC coverage. This “rising tide” did indeed lift all boats, albeit to a more limited degree than hoped for, given the challenges of the economy and other industry matters at the time.

Another example of a “government voice” helping to raise awareness are the 20-plus states that have adopted LTC insurance programs for public employees and retirees. Market penetration is higher in these states than in others.

Similarly, three of the four Partnership states have above average market penetration. And in the pilot states where governors and the federal government collaborated on the “Own Your Future” LTC awareness campaign, preliminary evidence suggests there was an important “lift” to both inquiries and sales in those states.

At this challenging time, the industry can be proud it is coming together to focus on critical priorities and initiatives that can help make it happen rather than simply waiting for Godot.



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