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LTCI Watch: Soylent Green spoiler alert

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People could disagree about whether Soylent Green is a good movie or even whether it’s really accurate about what the gradual end of society was we know it would be like, but it’s certainly a good metaphor for what happens when we fail to make adequate plans for taking care of the elderly.

Anyone who’s involved in long-term care (LTC) planning, and certainly anyone who’s trying to selling LTC or retirement planning services to members of Generation X, should already know what Soylent Green turns out to be: It’s a tasty, affordable food made out of people.

It seems completely reasonable to me for consumer advocacy groups to be complaining about the effects of long-term care insurance (LTCI) premium increases on policyholders, and to wonder if there might not be a better way. Maybe the consumer groups are being at least somewhat unreasonable, and maybe the grim truth is that there is no better way, but someone has to be standing up for that position.

But the people actually getting the media attention about LTCI concerns in the past few weeks have not been the consumer advocates trying to knock the rate hikes down a few percent, but investors and securities analysts who are angry at several publicly traded insurance companies for efforts to make sure they have enough LTCI reserves to meet their LTCI claim obligations.

This is the fault of the Federal Reserve Board for lowering interest rates to keep the U.S. government and the big U.S. banks afloat, and to Congress, for letting gridlock freeze policymaking to the extent that the only practical way to keep the party going is to use the pension money and the long-term care insurance money to keep up illusions today. 

Congress and the Fed have, in effect, written down the future of the American people and saying it has little or no value. They’re saying, with their actions, that Soylent Green will at least metaphorically be people in 30 years, and that the true LTC planning tool for most Americans will be a hand gun, or the functional equivalent.

When insurance companies proceed on the assumption that they’ll be here 30 years from now, and that their customers will be here 30 years from now and expect to collect benefits, Wall Street rolls its eyes. 

See also: LTCI Watch: Shell game


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