Results tagged “CLASS Act” from Caring For Our Parents

The national long-term care insurance program called the CLASS Act will be included in the Senate Democratic leadership health reform bill that is expected to be released within the next day. The decision by Democratic leader Harry Reid to add CLASS to the bill is a huge victory for backers of the measure, which is already in the House-passed bill. However, many steps remain before the idea becomes law.

CLASS would provide a government-sponsored basic cash benefit to those needing long-term care services at home, in assisted living, or in a nursing facility. All workers would be automaticaly enrolled, although they'd have the right to opt-out of coverage. The design of the policies, including premiums and benefits, would be left to the Secretary of Health & Human Services.

The proposal is strongly opposed by many private long-term care insurance companies.   

It was a good day for supporters of the CLASS Act, the national long-term care insurance program that has been on the edges of the health reform debate. A version of the measure was included in the House Democratic reform bill introduced today by Speaker Nancy Pelosi. The decison all but assures the long-term care proposal will be included in the final House bill.

However, CLASS is running into new roadblocks in the Senate, where a consensus bill is still being written by Democratic leaders and President Obama. Key Democrats, including Kent Conrad of North Dakota and Ben Nelson of Nebraska, have turned sharply critical of the plan, especially because Congress would count premium revenues as a way to help pay for broader health reform. At the same time, big private long-term care insurance companies are stepping up their efforts to derail CLASS. One strategy: Delay passage by calling for a government study of long-term care financing needs.

The CLASS Act would make government long-care insurance available to all workers over 18. No one could be excluded because of pre-existing conditions. All workers would be automatically enrolled, although they'd have the option to opt-out.

Those with disabilities would receive an average minimum cash benefit of $50-a-day for life once they showed an inability to care for themselves. The premium for this coverage is uncertain. In earlier versions, the proposal set a target of an average premium of $65-a-month. Recent estimates by the Congressional Budget Office assume premiums would average around $120-a-month.    

However, the House version gives broad authority to the Secretary of Health and Human Services to design policies, including flexibility to set both premiums and benefits. For the poor, Medicaid would continue to provide assistance beyond the CLASS benefit. Others could purchase private insurance to supplement the government policies.

In recent weeks, nearly all advocacy groups for seniors and the disabled have lined up behind the measure. They see it as a major step towards giving those who need long-term care, either at home or in nursing homes, important financial resources. But the insurance lobby is hardening its opposition, fearing CLASS coverage would further damage an alrready-weak private market.  

I spent yesterday morning at a Kaiser Family Foundation panel discussion on the CLASS Act, the national long-term care insurance program being considered as part of health reform. The panelists, who included Senate Health Committee aide Connie Garner and a number of advocates for long-term care reform, were upbeat about the possibility that CLASS will be included in a final health bill. However, the idea still faces opposition from big private insurers.

Connie said the proposal continues to evolve, to satisfy both substantive and political concerns. However, its basic form remains unchanged: People would be able to participate as soon as they begin working, enrollment would be automatic, but they could choose to opt-out. Once they need care, they'd be eligible for an average minimum cash benefit of $50-a-day for life. The benefit would increase both with care needs and inflation.

It looks like the premium would now average about $120-a-month, twice what sponsors of the bill had first hoped. However, neither premiums nor benefits would be fixed in the legislation. Instead the Secretary of Health and Human Services would be given broad flexibility to design coverage.

While people would have to be actively working to be eligible for the insurance (a provision actuaries say is important to keep premiums relatively low), employers would not be required to offer a payroll deduction plan. This exemption could make enrollment complex and hold down participation.

We'll know within the next week or so whether CLASS will be included in the combined Senate bill. If it is, it will be a major step forward for the measure, which is already in the House version of health reform.     

The other day, long-term care insurance gadfly Stephen Moses called me "an advocate of more government financing and an enemy of private LTC financing alternatives." I assume he said this because I believe that reforms such as the CLASS Act, which would create a national long-term care insurance system, would be a far better way to pay for this assistance than the costly and inefficient mess we currently have.

Today, far too many Americans pay for care out of their own pockets until they run through their financial assets, then they go on to Medicaid, a welfare-like government program. Medicaid pays for their care in nursing homes, where they don't want to be, or, if they are lucky, provides some limited home care benefits. Almost no one buys Steve's preferred alternative, private long-term care insurance, because they can't afford it, don't understand it, and don't want to think about it. 

While Moses runs what he calls The Center for Long-Term Care Reform, he is an outspoken opponent of nearly all actual proposals for long-term care financing reform (George Orwell, phone home). His blog is bankrolled by the insurance industry, and his favored solution is to push more people to buy private LTC coverage by limiting their eligibility for Medicaid. Dude, the Democrats won the election.

He and I agree that Medicaid is a poor solution for those who need long-term care. For many, the benefit is both parsimonious and inappropriate, and care is poorly coordinated for those chronically-ill "dual eligibles" who receive both Medicare and Medicaid benefits. In addition, Medicaid is breaking the back of state budgets and putting enormous fiscal pressure on Washington.

That's why I like the idea of a national insurance program. Properly designed, it would give people more choice in the care they receive, ease the cost pressures on Medicaid, and substitute the personal responsibility of broad-based insurance for the welfare-like Medicaid system. So how does this make me "an advocate of more government financing?"

The CLASS Act can, and should, be designed to be self-financing. People would pay market premiums and get, in return, a benefit. No taxpayer dollars involved. If consumers chose, they could buy additional private long-term care insurance to supplement the CLASS benefit, much as they buy Medicare Supplement (Medigap) coverage today. And to the degree they'd be covered by a national insurance plan, some people could avoid Medicaid. That means less government financing of long-term care, not more.

I'd go a step further and make the insurance mandatory, but as long as it is self-financed through premiums there would be no new government costs.  

Steve's rhetoric echoes the absurd claims of a "government takeover" of insurance that we hear from some conservatives in the broader health debate. This argument is even more ridiculous in the context of long-term care reform. Private insurance pays only 7 percent of long-term care costs. Medicaid pays nearly half. It has already "taken over" paying for most of this assistance. In the real world, if your goal is to get Medicaid out of the long-term care business, a broad-based, financially stable, self-funded national long-term care insurance program isn't a bad place to start.

Oh, by the way Steve, despite your deepest wishes, I don't think the CLASS Act is dead. Far from it. The proposal faces an uphill battle this year--no surprise there--but it remains very much alive.

I moderated two interesting panels today at a long-term care conference sponsored by Genworth, the big insurance company. The first panel included author and family caregiving expert Virginia Morris, National Family Caregivers Association president Suzanne Mintz, and Ancil Alexander, a home health aide who visits clients in the South Bronx. Virginia talked about the desperate need caregivers have for information, Suzanne discussed the needs paid and family caregivers share, and Ancil gave a powerful description of just how hard it is to care for clients with multiple chronic diseases, including dementia. Some of the stories Ancil told reminded me of what the families I met in Caring for Our Parents went through.

The second panel was made up of congressional staffers, all of whom work for lawmakers who have sponsored long-term care legislation that Congress is considering as part of broader health reform. The aides included Connie Garner of the Senate Health Committee, who worked for the late Ted Kennedy for many years on a plan for national long-term care insurance (the CLASS Act); Alison Bonebrake, whose boss, Senator John Kerry (D-MA), is sponsoring a bill to make it easier for Medicaid beneficiaries to receive home care; Anne Montgomery, senior policy adviser to the Senate Aging Committee; and others. 

As readers of this blog now, long-term care is very much on the bubble in the debate over health reform. With changes in the overall health system so controversial, many lawmakers have been reluctant to confront long-term care as well. Financing issues such as the CLASS Act; Medicaid reforms such as Kerry's; and measures to encourage doctors, nurses, aides, and others to take jobs caring for the frail elderly are all in the mix. Each addresses a critical problem for the 10 million Americans who need long-term care and the 40 million family members and friends who help them. But all must overcome a wall of indifference if they are to become law.

In that environment, I asked each of the Hill staffers whether it is better to address long-term care this year as part of health reform, or to wait for another year or two and consider these issues separately. Every one of the six staffers on the panel said the same thing: Do it now. Don't wait. Get as much long-term care reform as possible today.

It sounded like a pretty good message to me.