On the Third Hand: LTCI Watch: Medicare, Part L

One challenge here is that, of course, this would expand government involvement in the LTC market. But, who are we kidding? Governments and government-like institutions have been involved with providing care for the old as long as there have been governments.

 If we were encouraging or requiring working-age people to buy their own, private or quasi-private LTCI coverage through Medicare Part L, that would be more of a free-market-oriented effort than simply assuming that a huge percentage of older people will end up in Medicaid as a matter of course.

 The insurers that provide the Medicare Part L options could invest their assets flexibly and productively, possibly getting a substantial amount of extra revenue, rather than depending entirely on tax revenue, the way Medicaid program managers do. Maybe the Medicare Part L portfolio managers could invest in business finance programs, infrastructure construction and maintenance programs, science and engineering education programs, elder care companies, dementia research programs, and other programs and companies that could improve the country’s ability to handle the “silver tsunami.”

 The biggest challenge is that some private companies and producers have worked very hard to stay in the private LTCI market up till now, and they deserve our love, support and cash.

 The managers of the insurance company LTCI units are probably doing whatever they can, from writing good white papers to wishing on rabbit’s feet, to get their companies to stay in the market.

 The executives of the parent companies are probably having nightmares about the idea of leaving older people in the lurch, but also having nightmares about what low rates on high-quality bonds are doing to their portfolio earnings.

 But, one interesting thing about all of this is that a lot of the producers and companies that have been active in the LTCI market are now trying to get into the Medicare Advantage or Medicare supplement insurance markets. If the producers and companies are already flowing into the Medicare universe, why can’t the LTCI products follow them in?

I don’t know if any of this work, and, again, I understand that the idea of letting the government intervene in a market in a new way is scary, but it’s not as if the LTC market is a particularly free market now. If we’re going to go cold turkey on government intervention, let’s start with healthy, working-age people who can fend for themselves, not with older people who have an inability to perform two or more activities of daily living.