The Obama administration's attempt to create a voluntary long-term care program was a way for the president to barter with GOP lawmakers on health mandates after his reelection, says Jesse Slome, executive director for the American Association for Long-Term Care Insurance.
But when problems surfaced, the Community Living Assistance Services and Supports (CLASS) program turned into a political folly for the White House and Democrats.
"What they are doing is slowly starting to hide [CLASS] in a corner until after the election," Slome said before the administration's decision last week to put the program on hold.
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"If Republicans take the White House and Congress (in 2012), health care reform and CLASS will be immediately repealed. If President Obama maintains the presidency, he'll clearly say, 'this is a mandate' for his programs. They will at that point use CLASS as some sort of bargaining chip. The chances of the CLASS Act seeing the light of day are somewhere between slim and none."
Staff members in the Department of Health and Human Services, dedicated to implementing the CLASS plan as part of Obama's health care reform act, were reassigned Thursday with no conclusion on whether the program would be picked up again.
This news came shortly after Congressional Republicans released a report calling for the repeal of CLASS, saying taxpayers, employers and states would be expected to come forward to pay for what is essentially a "flawed entitlement program."
The problem with CLASS is that it was not a workable concept from the get go, Slome says. "Even the best industry actuaries cannot find a way to make it workable as a voluntary program. The nation is clearly not ready for a new universal entitlement so (Obama and the Democrats) were caught between a rock and a hard place.
"People are not ready for a new Social Security or Medicare program to address long-term care, and a voluntary program couldn't be designed or priced so you would get a large number of healthy individuals to enroll."
America has a looming and growing long-term care problem because people are living longer. When you live past age 80, you're very likely to need long-term care, Slome says. To address the United States' need for long-term care services and supports, the country first must decide if having long-term care insurance is a personal responsibility or an entitlement. Somebody must pay for that care, but "since Americans don't save, they are turning to the government to pay for the care."
This debate pertains to health care as well. "We can't decide, is health care a right and an entitlement or is it a responsibility?"
The market for private long-term care insurance in the country is between 15 million and 18 million people. Currently, about 8 million are enrolled in private programs. But private long-term care insurance is flawed because it's only offered to people in good health, Slome says. Individuals have to meet four criteria to qualify for long-term care insurance: they must be at the right age to plan, healthy enough to qualify, be able to afford coverage and be planners.
"If you don't meet those four criteria, private long-term care insurance is not a solution," Slome says. The CLASS Act was an "effort to at least take a step forward to address the problem."
In their report released Sept. 15, Republican Congressional leaders claimed that the CLASS Act was included in the health care reform legislation to help reduce the nation's deficit by $70 billion over 10 years.
"This calculation was based on the premise that during the initial years of the program, it will take in more revenue in premiums than it pays out in benefits, including the first five years of the program in which no benefits are paid at all," the report reads.
It also claims the provision never planned for what would happen if it didn't attract enough healthy people to pay its premiums or didn't charge enough in premiums to cover its payouts over time.
Larry Minnix, CEO of LeadingAge, an association of nonprofit organizations dedicated to making America a better place to grow old, believes the CLASS Act passed because it was the "right thing for America to do and it's what Americans want."
In a statement released last week, Minnix said, "We look forward to continuing to work with the Administration on the implementation of the Community Living Assistance Services and Support (CLASS) Act. We believe a fiscally solvent, self-sustaining CLASS Act is not only possible, but essential for our country."
He added, "There is no other solution on the table right now to solve the crisis of paying for long-term services and supports. Today's pressures on both Medicare and Medicaid make the CLASS Act all the more important to help families and the government reduce the costs of care. To help our states, our families and people with disabilities, we must implement the CLASS Act."
Slome admits he really did think the CLASS Act could work. Unfortunately, he says, it's "one more casualty of the really bad global economy. If the economy had been chugging along and unemployment hadn't been there, then CLASS would have flown in under the radar. That doesn't mean it would have been successful in getting millions of enrollees, but at least it would have gotten started."
Even if this version of CLASS never gets implemented, Slome says, the long-term care problem will not go away. "There's going to have to be a CLASS 2.0."
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