Friday, November 5, 2010

Now that Republicans have taken over a majority in the House of Representatives, will CLASS  be stopped in its tracks before it even starts? (CLASS, Community Living Assistance and Supports is Title XXXII of The Patient Protection and Affordable Care Act).

Since a repeal of health care reform is highly unlikely, some are instead predicting a "piecemeal rollback" (CNN Money's senior writer Liberto), or "tweak" (Reuters' Heavey). CLASS could be a logical target. Lawmakers concerned about fiscal responsibility, who are reluctant to add another big government program like Medicare, Social Security, and Medicaid, may find that the repeal of CLASS might have bipartisan support, based on several reasons, some of which are found below.

• The government's own Center for Medicare and Medicaid Services, the Congressional Research Service, and a nonpartisan joint workgroup of the Amer. Academy of Actuaries and the Society of Actuaries have all issued communications raising concerns over CLASS' ability to be financially self-sustaining, as the law requires. Since CLASS is an opt-out payroll deduction program, with no medical questions asked, it is widely feared that the program will be a refuge for the uninsurable, while healthy workers won't buy in. The eventual result? Exorbitant premiums, or government subsidies/bailouts.
• Because no claims are paid in the program's first five years, the projected $72B collected in CLASS' first ten years lowered the projected cost of the entire health care reform package. This accounting manipulation illustrates one of the shortcomings of how federal bills are scored; in CLASS' case, long-term projected liabilities are not apparent in scoring, instead CLASS provides a short-term positive impact on the federal budget.
• CLASS distracts from the best long term care financing option available for businesses and citizens: private long term care insurance. This opinion is backed up by the federal governments' adoption of the Federal Long Term Care Insurance Program, which has been embraced by employees and members of Congress, and Congress' action, signed into law by President Obama, to allow the national expansion of Partnership long term care insurance plans. Workplace adoption of private long term care insurance is at unprecedented levels, as employers and citizens embrace private solutions to the universal problem of paying for long term care.
• CLASS is still on the drawing board. If CLASS were to be repealed, we hope that this happens before any Americans have enrolled in the program, and before both employers and the federal government have spent the money, time and effort to design, roll out, and maintain a whole new government bureaucracy. If CLASS is not be repealed, we encourage the Secretary of Health and Human Services to publish the plan details before the law's October 1, 2012 deadline.
• President Obama is in office until at least January 2013. CLASS will likely begin being implemented at participating workplaces in that same month. In the meantime, employers and citizens are well-advised to understand CLASS and what is known about its provisions. Contact a National LTC Network member for a complimentary 16-page "Guide to CLASS and Long Term Care Planning," booklet.

About National LTC Network

National LTC Network is an alliance of leading distributors of long-term care insurance. Network members are dedicated to marketing long-term care insurance with knowledge, ethics and excellence. Founded in November 1994, members of The Network include some of the largest and most respected distributors in the nation.