When Elizabeth J. Rappaport showed up at Howard County's annual Older Americans' Day Luncheon recently, she got more than lemon chicken and cheesecake for her $3 ticket.
She was introduced to Metropolitan Life Insurance Co. agents, who played a central role in the luncheon: MetLife agents ran a prize drawing, handing out Snoopy dolls and gift certificates; a regional MetLife official gave a speech, mentioning MetLife products and introducing the cadre of agents in attendance; and the company invited the 700 seniors there to seminars on long-term care insurance.
MetLife paid $6,000 to the county Office on Aging to underwrite the luncheon, part of a new strategy of buying access to potential customers in a fast-growing market -- financial services for the elderly.
The insurer is working with several of Maryland's regional offices on aging, forging partnerships that regional officials say help them better serve the public.
But some critics say that by allying themselves so closely with MetLife, officials may appear to be recommending the company.
"It's not the government's job to appear to be endorsing any company or any product," says Del. Shane Pendergrass, a Howard Democrat, who attended the Howard seniors luncheon and serves on the House of Delegates panel that handles insurance issues. "When the office of aging has the county government's name next to the name of an insurance company, there may well be some in the elderly community who perceive that to be an endorsement, and that's worrisome."
"There is a definite tie-in, an endorsement or an implied &r; endorsement," says Rappaport, 70, a Columbia resident. "It's like you're buying good favor or something."
MetLife's sponsorship of the luncheon, Howard's largest annual event for the elderly, bought the company more than just a spot on the program. Like the insurer's $30,000 contribution to Baltimore County last year, MetLife's money is buying a special kind of entree into county senior centers where insurance companies are generally barred from selling their wares.
MetLife gets inside not to make a sales pitch, but to give a seminar on how to use a financial planning tool called "The File," which was devised last year by Baltimore County Department of Aging official Arnold Eppel.
The File is a bright yellow folder for recording vital financial
information, so loved ones will have just one place to look in case of the person's death or loss of capacity. On the front of The File are the MetLife logo and the logo of the county -- side by side. The MetLife telephone number is bigger and bolder than the number of the county office on aging.
MetLife pays to print The File for offices on aging in several counties, and sponsors events to hand them out. With the help of local officials, MetLife then gives seminars at senior centers on filling out The File.
Then it's time to do business: MetLife officials often invite the seniors to other insurance and investment seminars -- sometimes in the same senior centers -- where agents pitch the need to buy policies and financial services.
Regional officials view the MetLife sponsorship as a model for better serving the elderly while saving tax dollars. Eppel sought sponsorship for The File because his office did not have the money to print the 250,000 copies he wanted; MetLife's offer of $30,000 easily beat another insurer's.
Howard Office on Aging Director Phyllis Madachy says she approached MetLife when she realized that her annual luncheon for the elderly would prove too costly for the county to afford this year.
"We're very aware of course that businesses want to increase their visibility in the senior market, and where we can find ways of doing that while preserving the objectivity of the office, we look for such partnerships," she says.
A public service?
Regional officials say MetLife is doing a public service, not looking for ways to increase business. They point out that The Sun has been supportive as well, delivering The File last month to more than 140,000 Baltimore County subscribers for no charge.
"I honestly think MetLife is looking for a way to give back to the community," says Eppel.
MetLife officials, though, acknowledge that they also view The File as a great sales strategy.
Sales of long-term care insurance and retirement planning services have increased, in some cases substantially, for agents participating in the partnership since it began in Baltimore County last fall, says Lisa Deger, general manager at MetLife's White Marsh sales branch.
'Win-win situation'
"We've done more and more seminars than we've ever done here before, and The File has been the tool that has enabled us to do that," says Bruce Grunwald, regional market development specialist for MetLife. "Obviously the opportunities for doing business are enhanced by doing those, so it's a win-win situation."
MetLife is paying to print The File in Anne Arundel, Harford and Cecil counties, has pitched the idea to Montgomery County and hopes to take The File to the Eastern Shore. The insurer has also decided to pay Baltimore County $5,000 for the right to reprint The File anywhere in the country, and is trying to sell the idea to New York state's office on aging.
Eppel and Madachy say emphatically that cooperation between offices on aging and MetLife does not imply any endorsement.
"We don't allow them to go out and give this seminar and say the Department of Aging endorses Metropolitan Life," says Eppel, who has helped MetLife pitch The File to other counties. "We were careful."
Some other regional officials agree, though Elizabeth Boehner, director of the Montgomery County Area Agency on Aging, says her office generally prints disclaimers on sponsored materials.
Critics say these partnerships go beyond the norm in today's privately underwritten world, where everything from county fairs to public stadiums bear corporate logos. In MetLife's case, public officials are introducing seniors to one insurance company's agents, helping agents build the personal relationships that are crucial to selling policies.
Potential pitfalls
"You're subtly beginning to involve the government in selling the product," says Elliott Sclar, a Columbia University professor who has studied public-private partnerships and privatization for the Washington-based Economic Policy Institute. Sclar says such relationships can be valuable but are fraught with potential pitfalls.
"It's not easy to police these things," Sclar says. "If you can help some people out and they make a few sales and they don't sell the wrong and abusive products, then what the hell. But there's a good chance that they're going to start selling absolute junk with high fees, and really abuse [seniors'] savings."
The elderly, many of whom have modest life savings and may be insecure about their financial future, can be particularly vulnerable, Sclar says. And the elderly are a growing target market for selling complex, often expensive long-term care, and retirement and estate planning packages.
Long-term care insurance, which covers lengthy nursing home stays and extended home health services, is a small but growing product in what some call an otherwise stagnant insurance market. More than 80 percent of the more than 5 million long-term care policies ever sold have been sold in the past 10 years, industry figures show.
Costly premiums
But experts say long-term care insurance is pricey and hard to sell. A 1997 Consumer Reports analysis of long-term care shows premiums can range from $1,500 a year for a policy purchased at age 65 to as much as $4,500 a year for a policy bought at 75.
At MetLife's long-term care seminars, there is little discussion of high premiums. Instead, at one recent seminar in Columbia, a MetLife representative warned seniors there was a "high probability" they'd need care. The agent compared not having coverage to not having homeowners' or car insurance.
"Make sure you have coverage in all areas," said Alan M. Landay, a certified financial planner for MetLife. "Either we can pay for [nursing home care] ourselves, or, hopefully, we have some type of insurance in place for us."
Landay then told the audience of 14 seniors, a number of whom came after being invited by MetLife at the Howard County luncheon, to at least apply for coverage to see if they qualify. A half-dozen MetLife agents stood ready at the back of the meeting room.
"When we sit down with people, the first consultation is no charge," Landay said.
MetLife sells several other insurers' long-term care policies, and hopes to sell its own policies in Maryland soon.
Rappaport, who had come to the seniors luncheon and the seminar, did not take up MetLife on its offer of a free consultation. She's considering whether she wants to do business with MetLife, but she's not so thrilled the county is doing business with MetLife.
"They know what they're doing, MetLife, in endorsing something like that," she says. "It's a fertile market."
Pub Date: 6/29/98