Editorial Comment:
An Effective Industry Response

Once again, the long term care insurance industry finds itself pilloried on page one of a national publication. This time, it was page one of the February 22, 2008 issue of the Wall Street Journal. Once again, the industry needs to decide if and/or how to respond. 

The article by writers Jennifer Levitz and Kelly Greene seems to question why states are drawing attention to LTC planning, urging citizens to consider purchasing LTC insurance, and "promoting" LTC polices via marketing partnerships with insurers (i.e., the state Partnership plans). Among other things, it alludes to consumer complaints about big rate increases and/or claims payment difficulties, and gives 3 examples of consumers who have clashed with LTC insurers on these scores.

Steve Moses, president of the Center for Long Term Care, Seattle, Wash., has already written to the writers, pointing out facts and issues they did not address and suggesting that "we should talk." Other LTC leaders have penned responses too.

Responding to and talking with writers of such articles is worth trying. Maybe meaningful dialogue will result, where the writers and industry leaders get a better handle on each other's perspectives.

But the industry should also look into developing some credible data about price increases and consumer claims, for public consumption. Several industry groups and firms already have relevant data, but that is mostly for use inside the industry. (For instance, at press time, the American Association for Long-Term Care Insurance, Westlake Village, Calif., unveiled its 2008 Long-Term Care Insurance Sourcebook, which contains quite a bit of LTC insurance data; however, this is aimed at industry professionals, not consumers).

Such data needs to be simplified in a way that consumers can easily understand, and it needs to be disseminated to – actually sent to – regulators, legislators and yes, general assignment and other business reporters. Posting on a website helps, but active distribution is needed as well, because LTC researchers often do not know where to look on the web for such data other than the website of National Association of Insurance Commissioners.

Several "attack articles" on LTC insurance cite anecdotes of individuals who have suffered at the hands of an insurance company. Rarely, if ever, do these articles reference individuals who have felt they have been well treated by an insurance company. Is this because the writers chose not to feature those people, or is it because the writers did not have anyone supplying them with names of people to contact for "the other side of the story?" I suspect it is the latter. Industry leaders need to change the dynamics by providing such information to individuals and organizations who are researching the industry.

Finally, industry leaders should not be bashful about acknowledging that LTC insurance is a work in progress. They need to let the public know that LTC insurance products are still evolving, as developers seek to design plans around changing caregiving practices, longevity trends, inflation, care preferences and many other factors.

To say otherwise is to defy reality. This is still a relatively new industry, in its modern format, so industry specialists must keep on their toes about fixing problems, updating features, and building appropriate consumer expectations about what LTC insurance can and cannot do. If remedies are already in the works, point that out as well. The public likes industries that walk the talk.

Steve Moses, in his letter to the WSJ writers, does concede that LTC insurance is not perfect. The industry "has its work cut out to improve claims processing and payment," he allows. But he also tells why LTC is important, especially in view of coming Medicaid funding woes and other problems. That's the way to do it--balance the need for improvement with the statement of value and the in-your-bones conviction that the industry is moving in the right direction.

In short, an effective industry response should include delivery of credible data about LTC insurance, pricing and claims; anecdotes about how LTC works the right way; and willingness to talk about the pros and cons. Over the long term, this should help build reality-based understanding. That, in turn, should help put the industry in a more positive light. At least, it would be a start.

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