Long-term care insurance proving easy to ignore
James M. Berklan, McKnight's Editor
For those too young to recall, it was an innocent statement during a 1990 press conference that got George H.W. in trouble with a portion of the farming crowd. It was meant to be a statement to show bonds with kids and others who didn't like to eat broccoli. George as the independent commoner, if you will.
Foul! Cried the farmers, fearful that broccoli futures would sink with the dis-endorsement from the White House. The then-president quickly retracted and spun the statement in another direction (saying his wife loved to eat it). In doing so, he likely saved many a vote from the broccoli-growing fraternity.
Getting people to cozy up to private long-term care insurance is proving to be a bigger challenge. As the esteemed long-term care journalist Howard Gleckman points out, folks seem to be treating LTC insurance like many kids treat vegetables. They might acknowledge they're good for the body, but they're still not biting. Even a Snickers bar and a nickel — known bribe fodder for certain parents trying to induce vegetable eating — won't work here.
Insurers are feeling the effects too. Genworth, Prudential, John Hancock, MetLife and others are slowly but surely retreating from the marketplace. They are, after all, businesses and if not enough people want to pay for their product, well, there are other crops to plant and harvest. Sayonara vegetables, or in this case, long-term care insurance offerings.
Vegetables might be necessary to help sustain life, but LTC insurance is just there to make it better at the end. At least that's the popular line of thinking that is keeping buyers away in droves. Especially with the price tag increases some have seen as premiums are adjusted each year.
Like PBS, bran cereals and youth in general, the appeal of long-term care insurance is wasted on the young. And ironically, of those who are buying policies, not enough are abandoning them early, thereby denying insurers of a projected revenue stream.
It's a predicament that has no easy answer. Like explorers finding themselves in a pit of quicksand, insurers need a rescue line — tougher eligibility for Medicaid and Medicare services maybe, or other new insurance products to peddle, for example. Based on the big, gleaming buildings many have erected in the largest cities in America, here's betting they'll find a way to survive — with or without long-term care insurance on their sales list.
