The CLASS Act, created by Ted Kennedy and included in the Affordable Care Act, establishes a voluntary federal long-term care insurance program. Currently, people requiring long-term care need either private insurance or to qualify for Medicaid. Right now, around 40% of all long-term care is funded through Medicaid, and given that Medicaid faces budget cuts that could rip it of its effectiveness, that’s simply not sustainable. Under the CLASS Act, subscribers could purchase an affordable long-term care insurance policy run by the government, to give them a modicum of protection in their later years.
The Gang of Six, in their plan for austerity, eliminated the CLASS Act before it even had a chance to collect any premiums or set up its systems. Kent Conrad never liked the CLASS Act, and now he got his wish. There were concerns about the financing over the long term, but importantly, CBO estimated that the CLASS Act would actually be a net benefit to federal revenues over the next ten years, by about $78 billion. Howard Gleckman writes:
While CLASS is deeply flawed, it is an opportunity to transform long-term care from the means-tested Medicaid program to an insurance-based system. If CLASS is repealed, that opportunity will be lost, and millions of Americans will find themselves with only a shrinking Medicaid benefit to support them in frail old age or if they become disabled at a younger age […]
While advocacy groups such as Leading Age, which represents some non-profit long-term care providers, immediately urged the CLASS repeal be dropped from the budget bill, I suspect their concerns will fall on deaf ears. CLASS is a tiny piece of a huge fiscal package and I see no one on Capitol Hill willing to defend it aggressively. With Obama and Congress looking for a way out of fiscal gridlock, CLASS will likely be lost in the noise of the bigger budget debate.
If so, CLASS will be remembered as a sadly missed opportunity, and those of us who worry about how the nation will fund long-term care will find ourselves back at square one.
This just shows the short-sightedness of the bean counters in Washington. The more intelligent way to look at this is, we have a problem with long-term care. It’s not affordable as private insurance, and Medicaid struggles to give even a meager benefit. We could let people die in their homes alone, or we could design a program to provide a cheaper insurance package, run by the government, that could give some aid and comfort. We could even make it self-sustaining if we tried.
But “we do big things” is a mantra only for cutting budgets these days, not providing help to the afflicted.