Long term care insurance suffers from a generally poor view by the public, including that it’s too expensive, that it’s unlikely a given consumer would ever use it, that it’s sold by people who don’t have the consumer’s best interests at heart, and that most people could probably handle any LTC needs perfectly well without it.
Those were some of the main image issues for LTC insurance cited by a panel of professionals focusing on the industry’s public perception during the Society of Actuaries’ Intercompany Long Term Care Insurance conference here last week.
Mark Meiners, director of the Center for Health Policy Research and Ethics at George Mason University, said the industry needs to be more concerned about such issues.
“If we’re limiting our message to the high end of the market, it doesn’t create public acceptance,” he said. “We need to address middle-income consumers and show they can afford it.”
State-approved Partnership policies are a way for “public perception and public policy to come together,” he said. Meiners helped spearhead Partnership policies almost 20 years ago while with the Robert Woods Johnson Foundation.
Partnerships are increasingly viewed by consumers as an efficient way to subsidize LTC, making it possible for people to qualify for Medicaid benefits, if they exhaust their policy, without having to “game” the Medicaid system, he noted.
“We don’t want to depend on Medicaid,” he said. “But it’s an important safety net, and Partnerships are an important part of improving public perceptions” of LTC.
But Partnerships bring their own challenges. Meiners warned that differences among the states as they continue to create their Partnership programs could leave some consumers stranded, unable to find reciprocal benefits when they moved to a new state.
The industry itself can improve consumers’ view of the product by making it more straightforward, emphasizing benefits that consumers really need. He advised the industry to measure and track the cost-effectiveness of LTC policies, saying this could ultimately create a wave of favorable perception toward the product.
David Simbro, vice president of the LTC insurance department for Northwestern Mutual Insurance Co., said the main issue was how to get people to focus on the underlying need for LTC insurance.
LTC insurers all seem the same to many consumers, he said. “Why buy from Company A vs. Company B?” he asked. “Usually it’s what the agent recommends. It’s a trust relationship that ultimately moves the consumer to action.”
To help LTC insurance evolve into a product more in demand, intermediaries are needed in the form of salespeople, he said. “The influence of distributors must be relied on to change the perception.”
Trust is easily lost, he noted, pointing to the example of Bear Stearns Inc., the investment firm whose collapse was announced just as the SOA conference was getting under way.
The key to building LTC trust is through the producers, who focus on consumers’ needs, he said. “We can get so enamored of driving the cost of long term care insurance down, but that doesn’t matter until consumers see its value,” he concluded.