What will the impact of yesterday's election have on LTC Insurance? Nobody knows, but that doesn't mean we shouldn't try and make some educated guesses. At the risk of exposing myself to feedback, here is my opinion on the subject!
Interest Rates : One of the challenges for LTC Insurers has been the extended low interest rate environment. Donald Trump has described himself as "the king of debt", and has stated he would greatly increasing spending on infrastructure while not making dramatic changes to Medicare or Social Security. Higher long-term interest rates could help both in-force LTC Insurance and the assumptions on future products, resulting in a healthier industry.
Trade War: On the other hand, Donald has also said he is wants to greatly increase tariffs with countries such as China and Mexico. If a trade war results it could trigger a recession or worse and impact the ability of people to buy coverage. In addition, a Chinese company is in the process of buying Genworth. If that deal becomes political and doesn't happen, it could be bad for the policyholders.
Tax Deductions: Trump has said that he wants to allow individuals to be able to fully deduct their health insurance premiums like employers can do. LTC Insurance is health insurance, and allowing for an individual deduction could help generate new sales.
Medicaid: Medicaid is the largest payor of LTC care bills. Trump is interested in "block granting" Medicaid to states, which may reduce the amount of public money available for care and encourage more private pay LTC, including the purchase of LTC Insurance.
- Immigration: The bedrock of his campaign, Trump wants to deport undocumented workers and make it harder for new immigrants to get into the country. Who is going to provide the LTC workforce? I , for one, don't see unemployed coal miners and steelworkers doing it. With the cost of care increasing due to a worker shortage, will plans that cover care be too expensive to afford?
Perspective: Don't forget federal LTC related legislative changes still require the approval of the Senate, and the founders of this country made sure that Senators have a LOT of power to slow, delay, or stop legislation (see the history of voting rights). In addition, state regulators play a big role as well. Nobody can do it alone.
Recommendations for clients asking about LTC Insurance? If they are healthy and can qualify for coverage, both stand alone and Linked LTC Insurance can help protect their portfolio and their family. Keep talking about it!
November is LTC Awareness monht - check out