A Healthcare Plan With No CLASS
The Community Living and Assistance Services and Supports program (CLASS) was the part of Obamacare that was to provide for long term care. It now appears that the administration is going to shelve it. HHS denies that CLASS is being terminated and say that they are just pausing for a further analysis of the program.
HHS may not be ending the CLASS program outright, but it does appear that they are backing away from it with the following statement; "As we have said in the past, it is an open question whether the program will be implemented."
As virtually everyone who is versed in such programs has said all along, CLASS makes no actuarial sense the way it was proposed. Supporters have attempted more contortions than a Cirque de Soleil acrobat trying to find a way to justify this actuarial fantasy.
The main flaw with this program is that, unless large numbers of healthy people, who will probably not need the care, voluntarily sign up, premiums for the smaller number of less healthy beneficiaries will soar beyond any reasonable expectation of their ability to pay. The only way to keep premiums low would be for the government to subsidize it or to mandate enrollment. Can you say new taxes? I knew you could.
According to the Wall Street Journal, the actuary responsible for the CLASS cost estimates has left the program and is returning to the private sector. Eight people on the program staff have been told that they are being reassigned. Although Sebelius has until next year to make a decision, there is mounting sentiment among industry experts that the CLASS Act is dead.
So why "pause" it without terminating it? One possible reason is that as long as it stays on the books, it counts as reducing the deficit in the 10 year budget accounting window. This accounting slight of hand occurs because the Act mandates several years of premium payments before it has to pay out any benefits.
Meanwhile, the LTC insurance industry is left in limbo. This is what happens when bureaucrats with no experience in an industry, meddle where they do not belong.
HHS may not be ending the CLASS program outright, but it does appear that they are backing away from it with the following statement; "As we have said in the past, it is an open question whether the program will be implemented."
As virtually everyone who is versed in such programs has said all along, CLASS makes no actuarial sense the way it was proposed. Supporters have attempted more contortions than a Cirque de Soleil acrobat trying to find a way to justify this actuarial fantasy.
The main flaw with this program is that, unless large numbers of healthy people, who will probably not need the care, voluntarily sign up, premiums for the smaller number of less healthy beneficiaries will soar beyond any reasonable expectation of their ability to pay. The only way to keep premiums low would be for the government to subsidize it or to mandate enrollment. Can you say new taxes? I knew you could.
According to the Wall Street Journal, the actuary responsible for the CLASS cost estimates has left the program and is returning to the private sector. Eight people on the program staff have been told that they are being reassigned. Although Sebelius has until next year to make a decision, there is mounting sentiment among industry experts that the CLASS Act is dead.
So why "pause" it without terminating it? One possible reason is that as long as it stays on the books, it counts as reducing the deficit in the 10 year budget accounting window. This accounting slight of hand occurs because the Act mandates several years of premium payments before it has to pay out any benefits.
Meanwhile, the LTC insurance industry is left in limbo. This is what happens when bureaucrats with no experience in an industry, meddle where they do not belong.
Posted by The Health Underwriter at 9/26/2011 8:37 AM 
Categories: Legislation, Supplemental Voluntary Healthcare Products
Tags: Healthcare CLASS Act HHS
Categories: Legislation, Supplemental Voluntary Healthcare Products
Tags: Healthcare CLASS Act HHS
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