Editorial Comment: The LTC Tipping Point Is Approaching

Some years ago, a financial advisor told me she felt especially happy on that particular day. The reason: “I helped a client, really helped her. She’s financially okay.”

That comment, and the sense of satisfaction that came with it, is a powerful statement about the intangible benefits associated with financial advising.

But in the last several weeks, advisors have called here who are on the other side of that happiness. They are worrying about when the LTC business will get legs. They say:

• LTC promotions help, but when they end, so does the influx of new clients.

• Approaching retirement dates do stir interest in some prospects, but after counting their nickels, some would-be clients say they can’t afford LTC insurance.

• Seeing loved ones enter care helps motivate people to inquire about LTC coverage for themselves, but when clients see how spend-down leads to Medicaid, some just back off.

• Hearing about rollouts of new LTC products and features stirs hope via new solutions for clients, but that hope often gets doused by news of carrier exits and moratoriums on writing new business.

“Where is this business going?” is the common question, stated in exasperation.

It is doubtful anyone can predict, with certainty, when and where any industry will find its headwind. Yet, usually there is a tipping point that people point to—in retrospect if not in real time.

In the case of the LTC insurance business, that tipping point may be closer than many realize.

In this month’s issue, for instance, several articles carry news of federal bills that, if passed, could help boost awareness of LTC issues as well as sales of LTC products; an AARP study about how consumers are worrying about LTC costs in many countries; the start of a Massachusetts Insurance Department study of the LTC market; an IRS inquiry into a tax form involving LTC; and letters on how advisors are addressing LTC with clients. Previous issues of LTC e-Wire treat other LTC initiatives, ideas and strategies.

And in this month’s Feature article, NU Associate Editor Trevor Thomas points out how various LTC insurance experts are getting a grip on coverage durations to offer, in view of client needs and finances. Clarity seems to be emerging on this important topic, though of course complex decisions still need to be addressed.

Yes, the market is undergoing some stresses as some carriers exit or cut back and some consumers try to game the Medicaid system. Yes, some prospects do back away from coverage. But some other customers are buying—7 million is the total number of LTC policies now sold, according to Jesse Slome, president of LTC Sales Creators, Inc., Westlake Village, Calif. Some carriers are relentlessly pursuing LTC opportunities. And some business and legislative leaders keep pushing, individually and collectively, to study the market, assess needs and develop workable approaches.

There seems to be no signal, from anyone, anywhere, that LTC needs will evaporate or that the federal government will one day decide to pick up the tab for care of those having personal assets. Rather, the signals point toward designing ways to make personal funding the main form of paying for LTC for those having the means to do so. LTC insurance can, does and will fit into that picture. LTC insurance specialists do, too.

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--Linda Koco, Senior Editor, Products and Managing Editor, e-Publications
 National Underwriter Life & Health