Scott Harrison (Photo: Harrison) Scott Harrison (Photo: Harrison)

An insurance policy shaper who helped change how life insurers manage their reserves has come up with a new idea: establishing an organization that will get down in the legislative trenches and change how the United States handles long-term care finance.

The policy shaper, Scott Harrison, was one of the most visible promoters of the concept of “principles-based reserving,” or the idea of having life insurers set their reserves based on modern statistical forecasting and the judgment of actuaries, rather than static formulas.

He won that fight: The National Association of Insurance Commissioners has adopted principles-based reserving models.

(Related: Insurers Mark Significant Regulatory Shift)

Harrison has been looking for something else to do. He has started to hone in on the concept of taking some of the long-term care finance reform ideas in all of those many, many long-term care think tank reports and trying to get one or more of those ideas turned into a real program.

Harrison said last week, in an interview, that he’s dubbed his new, embryonic organization a “do tank,” because the goal will be to do things, as opposed to thinking about what someone else should do.

At this point, in spite of all of the hundreds of pages of reports long-term care finance policy think tanks have put out over the past decade, and all of the many concrete proposals proposed, “I don’t see much legislative activity at all,” Harrison said.

Harrison said that, when he talks to people at some of the most visible think tanks, their view is that their job is to think up ideas, not to implement the ideas.

Harrison who promoted the principles-based reserving idea mainly at the NAIC, and in state capitols, rather than at the federal level  said he thinks the most practical approach would probably be to start at the state level, rather than at the federal level, because governors often have a great deal of freedom to use Medicaid pilot programs to test new ideas.

Harrison is hoping to enlist a wide range of participants in the new organization, including insurers, long-term care services providers, and existing trade groups.

The form the organization would take, and its specific goals, would be up to the member organizations, Harrison said.

For now, he said, he’s referring to the topic as “elder care finance,” rather than “long-term care finance,” because of all of the toxicity now surrounding the term “long-term care insurance.”

But, clearly, he said, doing something about elder care finance is an urgent matter, because of the aging of the baby boomers.

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