Bonnie Burns is hoping that the U.S. private long-term care insurance (LTCI) market will bounce back from its current weakness.
Burns, a consumer advocate at California Health Advocates, Sacramento, Calif., represents consumer interests at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo. She has been helping consumers resolve disputes with insurers for decades, and, over that time, she has seen the private LTCI market expand and contract several times.
"This might be another one of those cycles," Burns said in a recent interview.
Burns said one key to a recovery in the private LTCI market will be insurers taking a disciplined approach to pricing. Competing based on price may seem like a good way to help consumers in the short run, but it will backfire in the long run if the prices are not high enough to support the benefits promised, she said.
Burns said she also would like to see insurers, regulators and others get together and try to develop a sustainable alternative to the ill-fated CLASS Act voluntary long-term care (LTC) benefits program.
One reason the CLASS program was doomed from the start was that federal law would have required it to take in workers who were already disabled, Burns said.
"That was just a nonstarter," Burns said.
Policymakers still might be able to develop a more realistic program that could use some government support to build a much larger, more stable risk pool than a private LTCI carrier can create, Burns said.
Burns acknowledged that private insurers already are trying to fill the gap left by the current contraction in the LTCI market by introducing life and annuity products that offer LTC benefits.
The LTC hybrids might work well for some, but the sorts of people who can afford life-LTC and annuity-LTC hybrids tend to be more affluent than the consumers who need the most help with preparing for LTC costs, Burns said.