CLASS Act LTC Archives - Long Term Care Insurance Expert | Honey Leveen

National Commission on Long-Term Care Finds No Solutions to LTC Crisis

September 20, 2013 by Honey Leveen Leave a Comment

On March 23, 2013 I blogged on the official demise of the CLASS Act LTC program.

The CLASS (Community Living Assistance Services and Supports) Act was supposed to create a voluntary, worker-paid long-term care (LTC) benefits program. Health and Human Services Secretary Kathleen Sebelius announced that the CLASS Act program was actuarially sustainable. Of course, we in the long-term care insurance (LTCi) industry knew the CLASS Act was “deader than a doornail” for a long time, way before CLASS was enacted. This legislation just makes its demise official.

The formal repeal of the CLASS Act on January 1, 2013 included the establishment of a national commission on long-term care.

The committee was tasked with creating solutions for our nation’s looming long-term care crisis, which I’ve often blogged about.

On Thursday, September 12, 2013, the Commission submitted its recommendations, right on their deadline.

This Forbes Column by Howard Gleckman, on September 13, 2013, reports that Commission members were unable to come to consensus on adopting Commission recommendations, primarily because the committee was unable to broach the subject of LTC financing, which is obviously the crux of the problem.

Quoting from Mr. Gleckman, “Sources say there was never much chance the commission–operating with limited resources, deep partisan divisions, and a painfully short time-frame—could tackle the controversial financing issue. Instead, the report will do little more than identify the two prime alternatives—expanding private savings and insurance options or a creating a public social insurance program– without endorsing either.”

Fiscal Cliff Legislation to Create New Long-Term Care Commission

March 23, 2013 by Honey Leave a Comment

On January 1, 2013, the fiscal cliff has was averted at the last minute with the passage of H R 8, the American Taxpayer Relief Act of 2012 (ATRA).

A section of ATRA 2012 includes the formal repeal of the Community Living Assistance Services and Supports (CLASS) Act. The CLASS Act was supposed to create a voluntary, worker-paid long-term care (LTC) benefits program. Health and Human Services Secretary Kathleen Sebelius announced that she could not set up the CLASS Act program because she could see no way to guarantee that the program would be actuarially sustainable. In reality, the CLASS Act has been “deader than a doornail” for a long time. This legislation just makes its demise official.

The most interesting part of ATRA 2012 for me is that it will establish a commission on long-term care.

The LTC commission is supposed to include representatives from LTC insurance providers as well members representing the interests of family caregivers, health care workers, users of LTC services, and users of LTC insurance. Some commission members are supposed to have demonstrated experience in dealing with public and private insurance.

The commission is also supposed to develop recommendations for creating “a comprehensive, coordinated, and high-quality” LTC system within six months after the commission members have been appointed.

We will see how this shakes out. Both parties agree that the biggest causes of budgetary concern are Medicare and Medicaid usage. I want to be optimistic and believe that sane, sustainable solutions for our nation’s long-term care crisis will result. Unfortunately, however, I am skeptical that much good will come of this new, well-intentioned panel, due to the current contentious political climate and the often demonstrated reluctance of legislators to broach the sensitive subject of Medicare and Medicaid reform. Stay tuned…

CLASS Act LTC Dead

October 17, 2011 by Honey Leave a Comment

On October 14, 2011, the Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced her recommendation to halt implementation of the Community Living Assistance Services and Supports (CLASS) Act.

Those of us who specialize in long-term care insurance (LTCi), including the Society of Actuaries and the head actuary of the US Dept of HHS, recognized from the outset that CLASS Act long-term care (LTC) was unsustainable as proposed. It was to be a voluntary program that was going to accept everyone in the workplace who applied, regardless of their insurability. This would have resulted in the most classic example of adverse selection ever. Had CLASS Act LTCi been enacted, there was budget to publicize the need for responsible planning. For healthy applicants who shopped, CLASS Act LTC would obviously not have been competitive with existing LTCi plans in either price or benefits. These two things would have been, in the short term, financially beneficial to advisors. However, in the long run, CLASS would have turned into one more giant government money-hemorrhaging entitlement program.

RIP, CLASS Act!

Fixing the CLASS Act

May 4, 2011 by Honey Leave a Comment

Here’s a terrific article in the April 29, 2011 New York Times by finance columnist Ron Lieber titled, ” Fixing the CLASS Act to Make Long-Term Care Affordable.”

Mr. Lieber accurately describes how “pie-in-the-sky” unrealistic and economically catastrophic enactment of the proposed CLASS Act LTC is likely to be. CLASS Act LTC, which would be government run long-term care insurance (LTCi), is a little known provision that was included in the passage of health care reform last year.

If you are using enactment of CLASS Act LTC as one more excuse to put off having a conversation about responsible LTCi planning, I urge you to read this brief article.

CLASS Act LTC Rests on Sickbed

February 23, 2011 by Honey Leave a Comment

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.”

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National Commission on Long-Term Care Finds No Solutions to LTC Crisis

Fiscal Cliff Legislation to Create New Long-Term Care Commission

CLASS Act LTC Dead

Fixing the CLASS Act

CLASS Act LTC Rests on Sickbed

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