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Life Health > Health Insurance > Health Insurance

LTCI Watch: Miss

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A week ago, I wrote an article about an insurer that’s trying to use a new approach to pricing its long-term care insurance (LTCI) business.

A beloved reader, Geom Guy, wrote, “Hopefully these carriers will have a MORE REALISTIC pricing going forward.”

I started to write a reply from the heart, then tried to figure out how to put disclaimers on my reply to somehow create the illusion, going forward, that I’m objective about all of this, then realized: Who am I kidding? 

I’m objective about gravity, and reasonably objective about Republicans versus Democrats.

I’m not objective about whether cute babies or good, or whether some guy who’s trying to strangle me should get to keep strangling me. There are limits to objectivity.

For me, one limit has to do with the idea that LTCI carriers were unusually unrealistic about pricing.

At a technical level: How should I know.

At a human, headline-reading level, I think the real story is: Human society as a whole was probably overly optimistic about just about every single mechanism for taking care of the future health care and retirement needs of the baby boomers, including the funding mechanisms.

Unless a spurt of unexpected good news suddenly gets us back on the overly optimistic track we originally intended to take, the finances of every boomer-oriented program created before 2001 is probably really in roughly the same shape as blocks of pre-2001 LTCI business. 

Vicious abuse of the Google book search tool reveals that the editors of National Underwriter, one of the print publications that feeds into, have been writing about the effects of the post-World War II baby boom on public finance since at least 1974.

For the next 50 years, the theme under the theme shaping just about every financial services article seems likely to be, “How we got everything about aging for the boomers wrong, and what we will do and are doing as a result of that forecasting miss.” 

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