Private long-term care insurance (LTCI) carriers may want to keep their product separate from acute health care insurance and retirement income benefits because silos make nice little markets.
Medicare, Medicaid and Social Security — and the fraud investigators that investigate them — may want to keep acute medical care expenses, durable medical equipment expenses, and long-term care housing expenses in separate silos because government employees have as much of an interest in protecting their nice little markets as managers of private enterprises do.
But I think the endless operatic bickering over how Medicare pays for “power mobility devices” — the scooters and electric wheelchairs advertised with catchy ads on cable TV and elsewhere — shows that all policymakers and policy watchers interested in aging, including those in the LTCI community, ought to be thinking hard about we align responsibility for the costs associated with aging.
Obviously, just about any time you have companies going on cable TV to promise viewers that they can get an expensive, really cool toy paid for by the government, with no out-of-pocket cost to themselves, you know something is going wrong with financial incentives. Aside, maybe, for something that’s of obvious value to society as a whole, such as measles shots or elementary education, just about nothing paid for by the government ought to be all that easy to get.
But, on the other hand: For older people who really need scooters to get around, and who will be able to continue to live independently, with a minimal level of formal care, with the scooters, maybe easy access to scooters — and “smart houses,” and even robots — is a great thing for public and private long-term care (LTC) finance programs as well as for the older people and the scooter makers.
If the deluxe $5,000 scooter with a cup holder and flashing rim lights will do a much better job than a $500 wheelchair at keeping Jane Doe from needing a home care aide who will cost at least $30,000 per year, then maybe it would be good for everyone involved if Jane Doe has the $5,000 scooter, not the $500 wheelchair.
Instead of the government, private insurers, older people and relatives dividing bills and responsibility for paying bills into many different conflicting categories, some individual or entity ought there really ought to have a financial stake in making sure that Jane Doe maximizes her happiness, her independence and cost efficiency.
If Jane Doe and her children are great consumers who’ve already outfitted Doe with the latest in value-priced aging services technology (AST), then, obviously, Doe and her children should be in charge.
What if, like most consumers, Doe and her children can barely get a cable modem up and running after many calls in to the cable company, let alone make great decisions about AST?
In theory, Doe’s doctor, “medical home” managers or “accountable care organization” could make the decisions — but will they have any real interest in, or knowledge about, Doe’s overall living expenses? What if they simply minimize the cost of care and equipment but push doe into an expensive nursing home sooner than she ought to go there?
A company that sells Doe an annuity or life insurance policy with an LTC rider might have a stake in minimizing Doe’s LTC expenses, but, in my experience, sellers of LTC hybrid products have little interest in getting into the details on the acute medical and LTC side, and state regulations may actively discourage the writers of the hybrids from treating the hybrids as anything other than products that pay out extra benefits under certain interesting conditions.
An LTCI carrier might be in a somewhat better position to balance acute medical care, LTC and asset conservation needs, but, under current conditions, it may have no knowledge of or influence over the acute care until an insured files an LTCI claim.
However: Some LTCI carriers can refer caregivers to case managers who can help the caregivers keep tabs on loved ones, find care facilities, and, even monitor the LTC providers.
Of course, many LTCI carriers’ current priority is survival. This might not be a great time to take on ambitious new projects.
Eventually, when things settle down (or a carrier decides it would rather get through the storm with boldness rather than with extra conservatism), maybe an LTCI carrier could make the care coordinators the chassis for creating a new approach to managing post-retirement costs.
A carrier case management system could work with Medicare to create late-retirement life managers. The coordinators would have a financial stake in helping the insureds minimize total spending on acute care, AST and LTC services while at the same time maintaining an acceptable quality of life.
Medicare managers might be willing to work with the coordinators, or even help pay the coordinators, because the coordinators could help Medicare avoid paying a fortune for fancy scooters for able-bodied retirees who simply like fancy scooters.
Honest medical device sellers might like the system because it could reduce the regulatory hassles involved with selling durable medical equipment to retirees who really need the equipment.
LTCI carriers would like the system, because it would reduce the odds that insureds would end up filing big claims simply because none of their friends or relatives knew how to help them use simple technology to adapt to problems with sight, hearing or walking.
Retirees and their relatives would probably complain a lot, because people like to complain, but they also would probably like the system (as well as consumers like any system), because they could turn to the coordinator for help with getting the cable modem up and running and having the Internet system provide some of the magical AST benefits that seem so wonderful in popular science magazine articles but so difficult for consumers to get working at home in real life.
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