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Life Health > Health Insurance > Your Practice

Maybe We're All Puerto Rico

By Allison Bell

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The U.S. government has imposed all sorts of misguided policies on Puerto Rico, and public and private players in the commonwealth have made bad choices of their own.

No one forced the commonwealth to build up $50 billion in public pension plan underfunding.

(Related: AARP May Be a Player in Puerto Rico)

Many commentators have written articles about how unusual Puerto Rico’s situation is. Puerto Rico can’t, for example, even seek the kind of ordinary bankruptcy court protection that a city in the 50 states can seek. The petition the commonwealth filed last week was for protection under a special restructuring law designed specifically for Puerto Rico.

Puerto Rico is so very, very different. Detroit was a lot different from most U.S. cities. I know nothing about Stockton, California, except that its bankruptcy filing involved pension obligations and post-retirement health benefits, but maybe it was a lot different from most cities. Maybe champagne came out of the taps.

Certainly, long-term care insurers are different. Issuers of life insurance and annuity products that offer long-term guarantees are different. Anyone who’s promised to do anything much other than exist in 2040 is different.

All 70 million baby boomers are so different. They’re so weird. They’re in a special economic situation that has nothing whatsoever to do with us. Nothing at all. They’re fine. Stop looking at them.

Of course, none of these groups is really much different from any of the others.

After World War II, public and private organizations began making benefits promises to citizens, workers and customers all around the world.

The number of people born each year boomed, then flattened out or fell, as people learned to like the idea of having just one to three children.

Now the whole world is figuring out how to reconcile the promises made within the demographic and economic framework that actually exists now, as opposed to what forecasters might have thought would exist from 1945 through about 1980, when they made the richest promises.

Stockton, Detroit and long-term care insurers went on the rollercoaster first.

Most of us will eventually ride it ourselves.

It’s hard to know what the best strategy is for getting through the ride intact. It’s possible that cruel ridicule is helpful. Maybe blaming Puerto Rico for being dysfunctional will somehow motivate the rest of us to function better, and make our own ride through the rollercoaster easier.

I think, however, that we have to keep the thought in the back of our heads that we may see the rollercoaster differently when we’re the ones going sideways and upside down.

— Read Some HealthCare.gov Shoppers Avoid Cheapest Plans on ThinkAdvisor.

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