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LTCI Watch: Intentions

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Some day, all in-force private long-term care insurance (LTCI) policies will be based on accurate actuarial assumptions, Ben Bernanke will stop clubbing insurance companies on the head with an interest-rate hammer, and the overall economy will be better.

But people — even reasonably well-informed people — will still have a tendency to react to thoughts about the future by freezing in place and not doing anything.

A beloved reminded me of this tendency in my own self a week ago by asking me what I’d done about own long-term (LTC) plan.

The grim reality is that I have low salary, a weakness for cappucino, a child, a terror of trying to use my health insurance to get the kinds of preventive care that make an individual attractive to insurance company underwriters, and. above all, an utter lack of a serious ability to imagine that any future other than the future portrayed in Soylent Green could really exist. 

Congressional Democrats are horrified by the idea that the Republicans might try to reduce Medicare and Social Security benefits for people like me who are part of Generation X. I’m just somewhat surprised by (and skeptical about) the fact that Congress has not yet given me a date when I’ll have to report to the protein supplement factory.

But, of course, all of the World War IIIs that I spent my life expecting have not yet started up, and it could well be that the republic in which I live, something resembling capitalism, and even investment funds could continue into the future and do really, really well.

But I suffer from brain ice. Mental paralysis. I think a lot of other people probably feel the same. We’re not really “squeamish about the idea that we might get older,” or about the idea that we might need LTC services. We’re squeamish about the idea of thinking too hard about what the future will really be like.

David Laibson, a Harvard economist, recently talked about a related topic — the difficulty of getting people to make healthy choices — at a presentation at a conference organized by the American Association for the Advancement of Science.

Laibson talked about simple mental tricks that can help thaw brain ice and get people to do what they already know very well is the sensible, conventionally accepted thing to do.

Laibson found, for example, that simply having people write when and where they would get a flu shot on a leaflet increased the likelihood that they would get a flu shot to 37 percent, for 33 percent.

Maybe LTCI carriers could talk to Laibson and figure out simple tricks to get consumers to ignore their sense of doom about the future and plan for the future based on the highly rational assumption that there’s a future worth planning for.

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