Health reform: October 2009 Archives

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.