Thursday, February 12, 2015

Stupidest Idea of the Year: An Early Frontrunner

Long Term Care insurance (LTCi) is arguably the single most complicated product we sell (tied perhaps only with Disability Income plans). It has a lot of moving parts, a very specific market niche, and is easily misunderstood. Underwriting is particularly involved because, unlike, say, life insurance, there can be multiple claims of varying degrees. The tax implications can be confusing and complicated, particularly for business owners. There are different ways that carriers count off their elimination periods, and how they price and define shared plans. And so on.

So naturally, Rocket Surgeon Paul Forte, CEO of some outfit called Long Term Care Partners L.L.C, thinks it would be a grand idea to market LTCi plans through Exchanges modeled on the ever-so-successful site.


One can see why he'd like that to happen: his company is the admin for two major Federal insurance programs, and one can never have too much of that sweet, sweet gummint largesse. That they would no longer feel the need for, oh, agents or underwriting is just icing, really.

Wait, what?

No, seriously:

"Allowing some medical underwriting could hold down costs without leading to a rate spiral, and keeping costs low could help make a big exchange sustainable even without the help of a mandate."

Yes, he's proposing the "Affordable Long Term Care Act" - because we've seen just how successful the ACA has been in reducing costs, not to mention folks' access to actual care.  And did you notice that interesting little turn of phrase: "help of a mandate?"

Remember when we were warned, during the initial SCOTUS fight, that if the government can force us to buy health insurance, they can force us to buy anything? That was dismissed as silly then.

Still sound silly now?

Didn't think so.

But wait, there's more:

"Forte would further reduce costs by putting the LTCI exchange system under the jurisdiction of the federal government, not state governments"

Yes, because Lord knows that the Feds are well-known for reining in costs and keeping to a tight budget. Heck, I bet he could reduce the cost of Long Term Care insurance by 3000%.

And what about that whole direct-to-the-public marketing scheme? Let's unpack that a bit:

"Those objecting to what they think will be lost by foregoing the services of live agents should recognize that the ALTCIP would not be geared to high-net-worth individuals, but rather to moderate-income persons seeking better value"

Well first, Mr Genius, high net worth folks already have plans in place, and many can afford to self-insure. They're also likely to have easy access to loads of expert advisors and financial planners. Long Term Care coverage is specifically geared towards middle class folks who don't have that kind of access, and to whom, for example, the Partnership Program is a real boon (does he seriously think that high net worth individuals worry about Medicaid spend-down?). These are exactly the kinds of folks who need agents to help them understand the difference between, for example, service and calendar days.

There is literally nothing positive or useful in this proposal; it is simply an embarrassingly naked attempt to grab a few more DC dollars, and to further damage the middle class.

Wonder if he thanked Ms Bell for the free advertising.
blog comments powered by Disqus