Why Are So Few Companies Selling Long Term Care Insurance?

In his article, “Should I Buy Long Term Care Insurance”, Richard Eisenberg, Money Editor for PBS-owned NextAvenue.org wrote:

“Insurance companies keep dropping out of this market….’a decade ago, there were more than one hundred insurance companies writing private long-term care insurance policies.’ Today, only a dozen remain…”

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Why would the number of companies selling a certain product determine the value of the product?

There were 1,800 auto manufacturers in the United States before 1930.  Ninety-nine percent of the auto manufacturers “dropped out of the market”!  Does that mean you should not own a car?

Over 400 insurance companies sold medical insurance in the 1990’s.

Today, in most states there are only 5 or 6 insurance companies selling individual/family medical insurance. Since hundreds of companies have dropped out of the medical insurance market, does that mean we should not own medical insurance?

Over 100 insurance companies sold disability insurance, in the 1980’s.

Today, about a dozen companies sell disability insurance. Since most of the companies have dropped out of the disability insurance market, does that mean we should not own disability insurance?

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Would any reasonable person say,

“Don’t buy medical insurance because most of the companies have stopped selling it.”

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Would any reasonable person say,

“Don’t buy disability insurance because most of the companies have stopped selling it.”

Today, there are 13 companies selling long term care insurance.  The long term care insurance market is expanding.  In the summer of 2016, a 106-year old insurance company that had never sold long term care insurance “jumped into the market” and started selling a very innovative product.  Two highly-rated insurance companies, that had stopped selling long term care insurance several years ago, are now selling it again.  

In most states consumers have MORE choices for long term care insurance than they do for medical insurance or disability insurance. What does that say about the viability and future of the long term care insurance market?