INTERVIEW A VOICE FOR THE SENIOR MARKET — WITH JESSE SLOME start coming out of their paychecks? Will people be upset over it? How will the program take shape? There are anywhere from seven to 17 other states that have initiatives to address long-term care. I’ve been around long enough to know that with every politician, the easiest way to kick the can down the road is to put together an initiative or a committee, but they never really see the light of day. People in the long-term care insurance industry are all excited about this. California is studying this initiative. I don’t believe you’ll ever see another tax imposed in California. But Washington state is the one to watch in 2022. The other thing to watch is the federal government. I always say long-term care is the problem. Long-term care insurance is only a very small solution and only one part of the potential solution to the problem. There are a number of initiatives from the Biden administration and the infrastructure bill and all of these bills, where they’re throwing hundreds of billions of dollars against this problem. They’re addressing Medicare and Medicaid. Ultimately, that’s the thing to watch. Both in the short term and in the long term, I believe that while it’s nice to advocate for a private solution, for most people the public solution is going to address it. One more thing is what I call shortterm care. Those products probably have the best potential to address consumer needs. Agents have clients who are too old or too unhealthy to get traditional coverage or who can’t afford the traditional solutions. There are only one or two carriers offering these products. I keep hearing from time to time about others that are thinking about it. I’m not sure why others have not entered this marketplace. In my opinion, you will see some of those products that will supplement government programs and address the needs of people who want something but they just can’t afford anything more. For long-term care, I won’t say that the years ahead are going to be rosy. But I’m certainly not predicting doom and gloom.
FELDMAN: For most people, will short-term care be where it’s at? 12
How Washington State Is Addressing The LTC Crisis Starting on Jan. 1, 2022, all W-2 employees in Washington state will be assessed a 0.58% premium assessment based on their wages. The employer must collect this premium assessment through a payroll deduction and remit the proceeds into a state trust account that will be used in the future to pay for people who are in a health crisis and need long-term care. Self-employed and federal employees are exempt from the mandate. The state WA Cares Fund is a trust account created to hold the funds. When an individual meets the thresholds and eligibility, the fund will pay out a maximum of $36,500 over two years and will be adjusted through the years to the consumer price index. The plan will require an inability to perform three out of 10 activities of daily living to qualify for the benefit payout as compared with two out of six required by normal qualified long-term care plans under Internal Revenue Code Section 7702b. But if the employee leaves the state, they will not receive any long-term care benefits from the state nor will the taxes taken from their income be returned. The state has opened a window of time until Nov. 1, 2021, for anyone to opt out of the state-mandated system by securing a privately owned plan or a group plan through their employers. They have until December 2022 to provide proof of coverage. From “Washington State LTC Law Provides Opportunity For Agents” by Val Mikesell, InsuranceNewsNet.com, June 28, 2021
SLOME: The long-term care insurance
industry suffers from a lot of well-meaning effort. I’m a marketing person and, in hindsight, we created this situation. We — meaning the industry, the agents, the brokers, the whole environment of asking people, “Where’s your million dollars if you need care?” They say, “Look at someone like Christopher Reeve, and you could need a lifetime’s worth of care.” And indeed, you always could. But when you actually look at the data and how people are using these long-term care plans, most people use their coverage for a year, two years, three years. For so long, so many of these studies positioned this product as nursing home insurance. It started as nursing home insurance and then changed to include home care. Now the vast majority of claims are for home care. But the mindset is so stuck on those products, that it’s hard for producers to change. It’s hard for consumers to change. When year after year, companies come out with studies that tell people what
InsuranceNewsNet Magazine » October 2021
nursing homes cost, it’s understandable why consumers associate long-term care insurance with nursing home coverage. When carriers raise rates year after year, it’s understandable why consumers are upset.
FELDMAN: How does someone get started in the Medicare market? SLOME: Your best bet is to partner with
somebody who already is in the marketplace, who will guide you and say, “I will help you with X number of sales and work out some sort of financial arrangement.” It’s not that difficult, once you go through the training and the other things; you can really learn it. The FMOs do a really good job of training. I always tell agents and brokers, don’t expect that you’re going to wake up and start selling this product and make $100,000 in your first year. But if you really focus on it, you can do quite well. It’s an ideal business for people who are committed. It is interesting and amazing to me how
