CLASS Act LTC

CLASS Act LTC Dead

October 17, 2011 By Honey Leave a Comment

On October 14, 2011, the Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced her recommendation to halt implementation of the Community Living Assistance Services and Supports (CLASS) Act.

Those of us who specialize in long-term care insurance (LTCi), including the Society of Actuaries and the head actuary of the US Dept of HHS, recognized from the outset that CLASS Act long-term care (LTC) was unsustainable as proposed. It was to be a voluntary program that was going to accept everyone in the workplace who applied, regardless of their insurability. This would have resulted in the most classic example of adverse selection ever. Had CLASS Act LTCi been enacted, there was budget to publicize the need for responsible planning. For healthy applicants who shopped, CLASS Act LTC would obviously not have been competitive with existing LTCi plans in either price or benefits. These two things would have been, in the short term, financially beneficial to advisors. However, in the long run, CLASS would have turned into one more giant government money-hemorrhaging entitlement program.

RIP, CLASS Act!

Fixing the CLASS Act

May 4, 2011 By Honey Leave a Comment

Here’s a terrific article in the April 29, 2011 New York Times by finance columnist Ron Lieber titled, ” Fixing the CLASS Act to Make Long-Term Care Affordable.”

Mr. Lieber accurately describes how ”pie-in-the-sky” unrealistic and economically catastrophic enactment of the proposed CLASS Act LTC is likely to be. CLASS Act LTC, which would be government run long-term care insurance (LTCi), is a little known provision that was included in the passage of health care reform last year.

If you are using enactment of CLASS Act LTC as one more excuse to put off having a conversation about responsible LTCi planning, I urge you to read this brief article.

Filed Under: Denial, Helpful Information About LTC Tagged With: Aging, CLASS Act, CLASS Act LTC, financial planning, Long-Term Care Planning, New York Times, Ron Lieber

CLASS Act LTC Rests on Sickbed

February 23, 2011 By Honey Leave a Comment

My colleagues and I, across the board in the long-term care industry, ranging from advisors like me to the leading actuaries, have been saying for a few years now that the Community Living Assistance Services and Supports (or CLASS) Act is unsustainable.

CLASS Act long-term care (LTC) is part of the late Senator Edward M. Kennedy’s legacy in the new health care law, intended to allow the chronically ill and people with disabilities to continue living in their homes.

A story in the February 22 New York Times titled, “Long-Term Care Needs Changes, Officials Say” reports that officials in the Obama administration finally agree with what we’ve been trying to tell them all this time: in its current state, CLASS Act LTC is not viable. It will not attract the number of enrollees projected, it will be a magnet for what we call “adverse selection” (people who are ineligible, due to their health, for conventional long-term care insurance) and it cannot stay in the black.

This article is excellent. It explains why CLASS Act LTC in its current form is “a dog that will not hunt.”

Filed Under: Helpful Information About LTC, Information About LTC Tagged With: CLASS Act, CLASS Act LTC, Edward Kennedy, Long Term Care insurance, LTC Insurance, New York Times