One of the scary things about reporting on a topic as complicated and sensitive as long-term care insurance (LTCI) is the humbling awareness that I’m just starting to learn about it.
Of course, the reality is that the LTCI industry is just starting learning how to provide LTCI for a population that varies dramatically in size, and the whole world is learning how to deal with fluctuations in population growth. Life is an experiment in progress.
The idea that a life insurance or annuity product that can provide LTC benefits when needed seems logical. Why lock money into silos? Money is money.
On the other hand: One reason I have any retirement money at all is that it’s locked in silos that I’m too tired and lazy to break into. If I continue to be lazy, and if financial services providers continue to exist, and if the current financial/monetary system continues to exist, then I’ll have at least some money — maybe enough to buy a few cups of coffee every month — when I retire simply because I would probably have to fill out some forms to get the money out of my 401(k) plan and individual retirement account, and the thought of filling out a form seems horrifying.
But another reason it seems as if it’s good to keep pure, stand-alone LTCI going is that it feels as if LTCI people tend to have a different approach to LTC finance than the people providing the hybrid products.
It feels, when I do interviews and read press releases, as if the hybrid products know everything the LTCI carriers know about LTCI costs but are somewhat less interested in the mechanics of LTC itself, because they won’t really be involved in paying money directly to LTC providers and probably won’t be involved in managing LTC provider networks. Maybe, at most, they’ll help give hybrid product holders access to a rented LTC provider network.
That approach may be simpler and cleaner, and help insurers avoid media wrestling matches between insurers and nursing home providers that claim mean old insurers are killing our great-grandparents with their tight-fisted, cold-hearted ways.
But, I think the truth that few like to admit is that the acute-care managed care companies have done a lot to keep acute-care doctors and hospitals from ripping patients off, and maybe to keep “doctors” with diplomas from the Great University of Advanced Photoshop Forgery from competing on the same footing as doctors with genuine medical degrees.
Maybe the fact that managed care companies are now so gungho about HEDIS scores, and making sure patients have their blood pressure checked and get the right kind of follow-up care for various HEDIS-tracked conditions, has led to actual improvements in medical care.