Howard Gleckman noting some options given the demise of CLASS. He highlights several key points:
- Long term care needs aren’t going away so we have to do something, with one option being to keep our default system (informal care first, with Medicaid as ultimate nursing home financier)
- Universal social insurance would be the most effective route to expand coverage, but we aren’t going to do that (a few thoughts on private LTC insurance)
One thing Gleckman suggests to move ahead:
- setting up a voluntary program provided via private insurers, with numerous benefit options
Allow insurance buyers to select from a menu of policies, including, say, a small daily benefit for life (like CLASS); $150 a day for three years; or $200 a day for five years. Companies could compete on premiums but would have to offer identical benefits so that consumers could easily compare policies. (similar to Medigap plans)
The most interesting aspect of the HHS report on CLASS was the conclusion that consumers were not interested in the benefit structure offered in CLASS (small benefits on the order of $50/day for unlimited period of time). From the memo of Kathy Greenlee in the CLASS office to Sec. Sebelius recommending CLASS not go ahead:
We developed a broad range of alternative CLASS benefit plan options….the benefit design that follows from the most natural reading of the statute….which calls for an average fifty dollar per day benefit for a beneficiary’s lifetime, diverges significantly from the design most buyers in the private market choose. Most buyers prefer higher daily benefits over a few years.
In the end, this may have been the most fundamental problem with CLASS; small benefits for a long period of time are not the type of LTC benefits that those interested in purchasing insurance want to buy. A big problem for a voluntary program. And the law as passed didn’t allow for changing the benefit structure appreciably without further legislation, which is politically impossible right now. There are options available to move ahead on LTC, but all will require the same impossible legislation, even if the vehicle used is private insurance. We appear likely to stumble into continuing with the default system that everyone knows has flaws, because of our inability to take any policy steps in LTC.