“Maybe not such a safe bet after all,” by John O’Connor, McKnight’s Senior Living

“So what are the takeaways here for senior living operators? I’d submit there are two. … One is that private insurance is not going to be the financial salvation for eldercare services its early backers had hoped for. Going forward, we can expect policies will cost far more and deliver far less. The business may not completely dry up. But it certainly will become more selective in nature. What we are far more likely to see – and in some corners are already beginning to see – is other insurance products offering limited coverage for eldercare services. … The other takeaway is this: Insurance of any kind can be a dicey proposition. That is important to remember as more senior living firms move to eliminate the middle man. To be sure, self-insuring can be a great way to save money. But it can also be a quick path to insolvency, should unforeseen circumstances intervene.”

LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform):

Veteran LTC journalist O’Connor knows the senior living business, but he’s never understood private insurance or Medicaid’s disastrous role in upsetting the LTC financing market. He also ignores the catastrophic impact of the Federal Reserve’s artificially forcing interest rates to near zero and the likely collapse of entitlement programs as the Fed-created asset bubble implodes. Private insurance will rise again, as the social safety net frays. O’Connor is right about one thing; senior living companies that gamble on self-insurance will rue the day.