Will we ever replace CLASS?

The House is set to vote today to repeal the CLASS provisions of the ACA. The remainder of the post below is very similar to my post on October 14, 2011, the day that Secretary Sebelius announced that HHS would not move ahead with CLASS implementation; the reality is unchanged.

CLASS clearly had flaws and I think that it is true that many LTC types knew this and felt that CLASS needed a conference bill more than most parts of the ACA. However, CLASS could be easily fixed with a change in the definition of work, a simple one time underwriting (can you climb one flight of stairs would likely do it) and auto enroll procedures if anyone was actually interested in the policy. People can of course be opposed to the government trying to set up a self sustaining LTC insurance scheme as a matter of principle, but then how do they plan to insure long term care?

The thing that irritates me most about the debate is the singular focus on the deficit accounting angle. Even if CLASS succeeded in policy terms (it became a self sustaining LTC insurance program) it would reduce the deficit for the first 10-15 years and add to it later simply because of the accounting rules used by CBO and the need to pre-collect premiums if the program was to be self sustaining. This doesn’t mean the CBO’s rules are flawed—you need one set of rules with which to judge policy and CBO is easily my favorite institution. However, deficit reduction/increase estimates just can’t answer every important policy question.

It is easy to get rid of CLASS. It is hard to figure out how to provide long term care. I hope the House Republicans will not only repeal CLASS, but mark up a replacement to address some of the many LTC problems facing our nation. John Goodman gave a few ideas. We really do have to do something unless we decide we are fine with the current system that has Medicaid as the last resort nursing home payer. Here is a nice summary of the status quo given by James Kwak who is sorting through the choices, options and problems as he considers purchasing a private long term care insurance policy today.

It is easy to be against something, but much harder to do better.


update: revised for clarity

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