What to do about CLASS

Buried deep in the Affordable Care Act, the CLASS Act ? short for ?Community Living Assistance Services and Supports? ? is a voluntary disability insurance program. Workers can choose to pay a monthly premium and, if and when they become disabled, the government will provide them with long-term care assistance. More on that here. In part, this is an effort to take some of the burden off of Medicaid, which currently pays these costs, and without much in the way of contributions to cover them.

The problem is that CLASS?s numbers don?t add up. The healthy aren?t likely to buy in, and that means it?ll be too expensive for the unhealthy. Secretary Kathleen Sebelius has admitted this, and promised she?ll use her authority over the program to make the reforms needed for the numbers to work. But as Howard Gleckman says, the most sensible reforms would require congressional approval:

Congress could fix CLASS by following the lead of nearly every other developed country in the world and turning it into universal insurance. A mandated program could make basic long-term care coverage available to all for an average monthly premium of only about $40, according to private consultants Avalere Health. And it could cut Medicaid long-term care costs in half, by about $50 billion. However, in today?s anti-government political environment, such a step is, shall we say, unlikely.

It may also be possible to repair CLASS through a series of technical changes, all designed to reduce premiums and make the product more attractive to healthy buyers. This morning, I participated in a panel at the Urban Institute that addressed those options. A podcast of the event is available here.

As you consider what to do about CLASS, keep the context in mind. Medicaid now pays more than $110 billion annually for the long-term care of both the elderly and disabled. It funds nearly half of all these services, and spends fully one-third of its entire budget on such care. By contrast, private long-term care insurance pays for less than 10 percent. And before they become eligible for Medicaid, millions of Americans go broke paying for these services out of pocket...That brings us back to CLASS. As poorly designed as it is, the program is an insurance-based alternative to means-tested direct spending programs that will be under growing stress in coming years. For those who want to kill CLASS, I have a simple question:If government assistance is not the answer, and CLASS insurance is not the answer, what is?

I?m open to the idea that CLASS isn?t the right way to address the mounting costs of long-term care. But that doesn?t absolve us from figuring out some way to address those costs. Leaving them to Medicaid or, worse, absolving Medicaid and simply abandoning the disabled, are much worse options than CLASS.

Source: http://feeds.washingtonpost.com/click.phdo?i=1cf355c9a82fa0ee1eb198ef5afe3b20

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