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LTCI Watch: Glimmer

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Massachusetts seem to be gearing up to develop long-term care insurance (LTCI) rate stability rules right out of some kind of 1970s time warp universe.

The kind of universe in which the simple way to adjust prices to a level that consumers can afford is simply to yell at the terrible, nasty, greedy insurance company executives until they cry, or wish they dared to cry.

Folks on the right tend, in my opinion, to run into reality check trouble when they ignore the reality that letting people die on the sidewalk stinks up the sidewalk for everyone else, and when they fool themselves into thinking that rules that lead money to flow into their contributors’ pockets are rules that create a level playing field.

Folks on the left tend, in my opinion, to be just about as quick to think that rules that lead money to flow into their own contributors’ pockets somehow create a level playing field and help the poor at the same beautiful time.

They also tend to have a scary tendency to think that society can come up with the resources to hold insurance prices down, provide insurance purchase subsidies for poor people, keep product benefits rich, and maintain high quality standards just by hollering.

Or, possibly, by carrying signs around. Or by sleeping outside in a park near the New York Stock Exchange.

One possible glimmer of hope is that the law that requires the Massachusetts Division of Insurance to look into updating its LTCI rate stability efforts also requires the division to do so in the light of an actuarial report that the division commissioned in 2009.

In that report, a consulting firm makes the following observation: “In order to ensure that long-term care insurance is viable in the future, it is prudent to review an insurance company’s financials and its ability to absorb losses before making a decision on requested rate increases.”

In other words: Before you try to squeeze blood out of a turnip, make sure there’s some blood in the turnip.

What a concept.

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