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LTCI Watch: Aware

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Talking about old age is hard. Talking about a possible need for long-term care (LTC) services in old age, or, heaven forbid, long before old age, is harder.

Insurance companies have sold all sorts of good, bad and ho-hum products for managing all sorts of risks, ranging from house fires to tuberculosis to, of course, a need for LTC services.

But one thing just about all of those campaigns have done, whether the products worked exactly as anyone had hoped or not, is to get people to have difficult conversations.

The conversations about fire risk led to modern fire safety codes that have saved countless lives, because the people who were writing the coverage and the people who were selling the coverage wanted to make money.

The conversations about tuberculosis led to modern sanitation in dairies, and to pasteurization of milk, because the people who were writing life insurance and the people who were selling the coverage wanted to make money.

Conversations about long-term care insurance may not have not gotten enough ordinary people thinking about either LTC risk or how to pay for LTC services, but at least they’ve encouraged some people to think a little along those lines, and they’ve prodded high-level policymakers to think more about the issue than they might have otherwise.

The policymakers’ immediate thought may be: Why does it look as if some of those private stand-alone LTCI policies are going to cost way more than the issuers thought?

See also: Compliance question hurts LTC awareness funding

But, then, if the policymakers take a moment to consider why even sober, careful private LTCI issuers set prices so unsustainably low, they might remember another important point: that the government is the default LTC provider of last resort for people who will otherwise end up on the sidewalk. State governments, local governments, the U.S. federal government, and the governments of other nations are as much in the LTCI business as any U.S. LTCI issuer.

See also: 5 top LTCI rescue ideas from other countries

Maybe, ultimately, the public LTCI book of business will dominate national, state and local governments’ operations more than blocks of private LTCI business dominate the operations of the U.S. insurers we commonly think of as LTCI issuers.

Governments benefit from the reality that it’s hard for citizens to lapse citizenship just to avoid having to pay for other citizens’ LTC care, and the reality that it’s hard to deal with the emotional ramifications of stepping over frail old people who are living on your sidewalk.

But governments face some of the same LTC burden drivers that the private issuers face, ranging from the aging of the population to sluggish economic growth. For private LTCI issuers, sluggish growth expresses itself as low interest rates on investments. For governmental LTC providers of last resort, sluggish growth expresses itself both as low rates on any trust funds they happen to have along with slow growth in the tax base.

Both private LTCI issuers and government LTC backstop providers also face the reality that finding ways to prevent and treat conditions such as Alzheimer’s disease and Parkinson’s disease is as important to protecting the country as having a strong military.

During this month’s Long-Term Care Awareness Month campaign, agents and brokers will use the incentive of, possibly, getting paid to motivate themselves to tell consumers about the need for LTC planning.

Maybe LTC-aware policymakers need to take time this month to use an interest in gaining political mojo to motivate themselves to tell other policymakers — and voters, and representatives from interest groups that aren’t instinctively all that interested in paying for medical research or social support programs — that fighting to control LTC risk is as important to them as controlling fire risk was to the skeptical, cash-strapped policymakers of the 1800s.

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