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LTCI Watch: Auto insurance

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The Hawaii Department of Health has put out a request for “long-term services and supports” awareness campaign proposals that, really, is an accidental awareness advertisement for general liability insurance, automobile liability insurance and workers’ compensation insurance.

Officials at the department are implementing a new state law that requires them to warn state residents that they ought to plan for future LTSS needs; that they might have to use or act as unpaid caregivers; and that Medicare and private health insurance do not ordinarily pay for LTSS.

See also: Real acronyms: LTC or LTSS?

But, for what may be good, practical marketing reasons, the officials neuter their own campaign in their own RFP by saying they want the new LTSS campaign to get away from the concepts of “nursing home care” and insurance, because those concepts are just too depressing. The officials want the winning vendor to emphasize the concept of “maximizing independent living.”

Critics of LTCI issuers sometimes say insurers got the product off to a bad start by focusing on the risk of needing nursing home care and other depressing topics. Those critics say LTCI issuers should have focused more on benefits people can use to stay in their own homes, which is where most people want to be when they get old.

Other critics say one huge problem with LTCI is that consumers get mad about the idea of paying all that money to the LTCI issuer and never using any LTCI benefits.

When I look at the Hawaii LTSS awareness RFP, the following thoughts come to mind:

  • Most people are happy to avoid having to file general liability and automobile liability claims. Few motorists go to bed and think, “Gee. I paid about $2,000 for automobile liability insurance this year and didn’t get to pay a hospital bill for a single annoying jaywalker.”

  • All adults who are old enough and sophisticated enough to read RFPs understand why a bidder needs liability insurance and auto liability insurance. The need for those products, and the existence of those products, is simply much better understood than the need for private LTCI, or than the need for any private LTCI alternatives.

  • State and federal agencies make having adequate liability insurance a routine part of doing business with the state. Officials want the vendors to pay for any havoc they wreak on property and lives.

One wonders: Why can’t those agencies come up with some way to get the people and entities that do business with them to insure against the havoc wreaked when they and their employees fail to plan for long-term care needs and then dump the bills on the taxpayers’ collective desk?

Maybe the same RFPs that contain auto liability provisions in the boilerplate should also contain some kind of minimum LTC financing provisions in the boilerplate.

See also: State LTC managers: Warm hearts colliding with cold reality


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