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LTCI Watch: Time

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I was going to write about ideas for making the idea of nursing home care chic, but then I watched a panel discussion on the “old old” organized by Altarum.

The panelists seemed generally to agree with the idea that encouraging more people to use private insurance to protect themselves against long-term care (LTC) needs is silly, because people are strapped for cash already and have other things they need to do with their money, and private long-term care insurance (LTCI) arrangements lock both the issuers and the consumers in a complicated relationship that could last 20 or 30 years or more.

I am passionately biased toward liking the people who sell, issue and administer private LTCI. In my experience, they’re great people who are doing all they can to help educate people about an important challenge and offer them tools for managing that risk.

I have no strong official opinion about whether any particular strategy is better for managing LTC risk than any other. I don’t have any strong opinions about whether space aliens will eat us all in the next 30 years, either. You never know.

And, of course, the doctors, counselors, caseworkers, LTC facility staffers and others who work directly with older people and their caregivers have a different perspective on all of this than the people in the LTCI community.

The people in the LTC community may hear about LTCI only when something has gone wrong with the LTCI. They don’t see the LTCI people struggling heroically behind the scenes to keep the LTCI policies working as well as possible, under difficult circumstances in which ultra-low interest rates are suffocating all efforts to insure insureds against long-term risks.

But what really troubled me was the idea that it’s unrealistic to expect the kinds of solvent workers who can afford car insurance, home insurance and some life insurance to put any effort into preparing for LTC bills that could roll 20 or 30 years from now.

The Egyptian pharaohs built pyramids that still provide funerary care services for the souls of the people buried therein.

The ancient Romans built aqueducts that are still providing transportation care services for drinking water.

If the Egyptians could arrange for tomb care for at least some people for millennia, and the Romans could arrange for water care for at least some water for millennia, why do we have so much trouble with the concept of planning for someone to help us eat 30 years from now?

Of course, some people may really have no excess money whatsoever and little ability to help meet their future LTC needs. But plenty of American workers are already saving regularly to meet retirement income needs that are likely to occur far in the future. Maybe not enough, but some. I’m pretty broke in some ways myself, but I have an IRA and a 401(k) plan because financial services companies, employers and the government got together to make it easy and painless for me to save for retirement, with income that doesn’t even seem to exist.

In theory, the financial services companies that took custody of that make-believe income are supposed to be plowing much of it into the energy companies, construction companies, technology companies and infrastructure projects that are trying to create the world I’ll be living in 30 years from now.

So, the retirement programs get me personally to lock funny money away, and they help create a concrentated pool of real cash that should, in theory, create the physical resources that will sustain me and people like me decades from now.

If we can get people to save on their own to handle at least a significant chunk of their retirement income needs, why is the idea that we should also try to handle a signficant chunk of our LTC needs so unimaginable?

Maybe experts could come up with irrefutable arguments that private LTCI products have failed beyond any hope of redemption. Well, lots of products failed. When National Underwriter, one of the print publications that feeds into, was created in 1897, one of its great causes was to promote a shift of the U.S. life insurance industry to a new “cash reserve” model, away from bad old “tontine” model that had failed in the 1800s.

Efforts to create reasonably stable “sickness insurance” crashed and burned many times before starting to look a little more realistic in the 1960s.

And, even if some people sincerely believe the government should simply pay for all or most basic LTC services, is the government necessarily the best place for a universal single-payer government LTC program to start?

I think the government would be much better off encouraging private companies to experiment, then stepping in to help sustain and expand the programs that seem to be the most sustainable, instead of pretending that it already has the answers, when, of course, it very clearly doesn’t even claim that it has the answers.

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