Like most successful companies, ours was founded to serve a growing need in the community, then nurtured by the passion and dedication of our founders.
Established by Frank M. Forman in 1974, Forman & Associates, Inc. soon ranged across 11 Western states, protecting thousands of policyholders against the gaps left by Medicare and Medicaid. These two government programs, launched a few years earlier in 1965, were generating a tidal wave of change in the way our aged population was about to receive, and pay for, its extended care.
Medicare itself—for all its good—came at a high financial cost.
No one knew this better than the government itself. In order to curb program costs in the 1980’s, Medicare began capping payments to doctors and hospitals based on a principle known as “DRG’s”. In this system, each “Diagnostic Related Group” would be reimbured only a fixed amount. This created a perverse incentive, since—if a provider could treat a patient for less than its fixed fee—it was allowed to keep any overpayment. Hospitals quickly took advantage of this loophole by discharging patients “quicker and sicker”—where once they would rehabilitate during a lengthy hospital stay, patients could now look forward to long rehab stints in nursing homes.
This created a boom in Nursing Facility utilization. While the market adjusted, Forman & Associates, Inc. was at the forefront. By the mid-1980’s, Mr. Forman was courted by some of the largest insurers in the country to help design and develop their LTCi products to address this emerging trend.
By the time the “second generation” of LTCi products came to market in the late 1980’s, the second generation of Formans was entering the family business, now stretching from the Atlantic to the Pacific. Patriarch Frank Forman remained a sought-after public speaker for groups as diverse and distinguished as the Department of Health and Human Services (DHHS), the American Health Care Association (AHCA), the National Council on Aging (NCA), the National Association for Home Care (NAHC), and the National Governors’ Association. Mr. Forman was also invited to provide expert testimony on LTC-related issues before the United States Congress.
His sons Gary and Stephen responded to the growing hunger for agent training in the Pacific Northwest as demand rose for this burgeoning industry. The oldest son—Robert—moved to Nashville in order to take command of a Fortune 500 subsidiary by the name of Long Term Preferred Care, Inc. (LTPC), one of the nation’s largest LTCi distributors.
As the “Graying of America” set in, mobile families made care from remote relatives increasingly less likely, while consumer-driven policies began to cover a vast array of new modalities from Assisted Living to Home and Community Based Care options.
Where do we go from here?
Like every industry they’ve touched, it is the Baby Boomers who most shape today’s LTC industry. Turning 65 at the rate of 10,000 per day, the amount of care they are predicted to utilize, and its cost, will be unprecedented. The Government has made it clear that personal responsibility will play a key role in funding the cost of that care. Reinforcing this message are LTCi policies with both tax-deductible premiums and tax-free benefits, and new “Partnership Policies” which protect assets from Medicaid spenddown and estate recovery in order to encourage their purchase.
LTCA’s mission is to ease the financial and emotional burden that a catastrophic care event can have on families. Today, we’re proud that the claims received by our policyholders have exceeded $14,000,000 and counting. With nearly 100 years of combined LTCi experience between the principals of our firm, we lead the country by serving over 5 million members of sponsoring organizations. Now entering our 5th decade, our commitment and passion for this business remain as strong as ever.