Wednesday, December 16, 2009

Long-term care program is fiscally sound

Thanks and a Hat Tip to Patti Dudek…

The Dec. 9 editorial "Health reform's heavy lifting" unfairly criticized the fiscal soundness of the CLASS (Community Living Assistance Services and Supports) Act, an innovative, voluntary, long-term care insurance program in the Senate health-care bill….

A closer look reveals that the proposal has new provisions to assure financial sustainability by reducing premiums, creating a healthier risk pool and new reserve requirements, and providing numerous safeguards to guarantee solvency over a 75-year period -- thanks to an amendment from Sen. Judd Gregg (R-N.H)….

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Scott A Olson said...

Right on!

The aim of the CLASS Act is not to create a new government entitlement program. It will be funded by the premiums of the participants (similar to Medicare Part B). And the $50 per day "average benefit" will only cover a small portion of the $60,000+ per year most Americans pay right now for in-home care. Most people who want to protect their savings will still need to purchase long term care insurance to supplement the CLASS Act benefit.

The biggest problem we face is that most Americans still think that Medicare or their medical insurance covers the cost of long term care. The CLASS Act addresses this problem by making a very clear statement: You have to pay for your own long term care. You either have to pay for your own long term care by using your savings, the $50 per day CLASS Act benefit, long term care insurance, or a combination of all three.

Most of the ten million Americans who own long term care insurance, own it because they've seen friends or family have to spend down their assets before qualifying for Medicaid. The CLASS Act will help alert the rest of the country to the fact that they need to financially plan for their future long term care needs.

Scott A. Olson

Jesse Slome said...

While I wish I could agree with my friend Scott Olson, I do not. It is my opinion that CLASS is nothing more than a Trojan Horse which will inevitably lead to a taxpayer subsidized new entitlement program providing long-term care benefits no different than Medicare. That's okay so long as American's realize and accept that future generations of workers (those now in their 20s, 30s or 40) will be paying the cost.
Jesse Slome
Executive Director
American Association for Long-Term Care Insurance