“What’s Bad for GE Will Be Worse for America,” by Timothy L. O’Brien, Bloomberg

“General Electric’s multi-billion-dollar loss in a unit that sold long-term-care insurance is a blow from which the iconic company is still reeling. But it’s also a harbinger of a much greater challenge for society at large: paying to care for the growing number of Americans who can’t look after themselves. … [T]he debacle illustrates a troubling truth: Private insurance can’t handle this problem by itself. … Medicare covers only a short period of care after a person has been hospitalized. That leaves Medicaid, the state-administered program for the poor. But it kicks in only after people have burned through their assets — precisely the outcome that insurance is meant to avoid. … The challenge is to design a safety net that will deliver long-term care when it’s needed — without making people destitute first, yet without burdening taxpayers unduly.”

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

Finally an article that recognizes the magnitude of the long-term care financing problem without casting blame. Good. On the other hand, it adopts the conventional wisdom that Medicaid LTC benefits are only available to the poor. If that were true, people would be eager to buy private LTC insurance at almost any price.  The fallacy that only the poor get Medicaid stands in the way of a “safety net that will deliver long-term care when it’s needed — without making people destitute first, yet without burdening taxpayers unduly.” We delivered the evidence, the logic and the solution in “How to Fix Long-Term Care Financing.”

What’s Bad for GE Will Be Worse for America

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