CLASS Act LTC Rests on Sickbed

My colleagues and I, across the board in the long-term care industry, ranging from advisors like me to the leading actuaries, have been saying for a few years now that the Community Living Assistance Services and Supports (or CLASS) Act is unsustainable.

CLASS Act long-term care (LTC) is part of the late Senator Edward M. Kennedy’s legacy in the new health care law, intended to allow the chronically ill and people with disabilities to continue living in their homes.

A story in the February 22 New York Times titled, “Long-Term Care Needs Changes, Officials Say”  reports that officials in the Obama administration finally agree with what we’ve been trying to tell them all this time: in its current state, CLASS Act LTC is not viable. It will not attract the number of enrollees projected, it will be a magnet for what we call “adverse selection” (people who are ineligible, due to their health, for conventional long-term care insurance) and it cannot stay in the black.

This article is excellent. It explains why CLASS Act LTC in its current form is “a dog that will not hunt.”