To reduce the number of uninsured individuals in the country, the health care reform’s Patient Protection and Affordable Care Act (PPACA) had established the Community Living Assistance Services and Supports Act (CLASS Act) but before the latter can be implemented it reached the dead end.
The Act would’ve served as a voluntary, self-funding long term care insurance program for members of the working class who are discouraged by the price tag attached to a standard long term care insurance (LTCI) policy.
In spite of its impressive concept that would’ve made it a good alternative to private insurance, the Department of Health and Human Services (HHS) later announced that the program is unsustainable. The government cannot help but cite the probability of getting more enrollees to the program who are at higher risk of care will inevitably increase the premium rate which is payable in five years.
One of the key components of the Act is affordable premiums but if it ends up paying more in benefits and receiving a very small amount of total premiums in 2017, there might be a possibility that not all claims can be paid.
To avoid the occurrence of such an unpleasant event, the government decided to repeal the said LTCI program for the time being. According to the Secretary of HHS, Kathleen Sebelius, before the program can resurrect it has to be financially stable for 75 years for it to be affordable to the consumers.
What CLASS Act Did Not See
Reviewing everything that has been said and written about the Act will reveal its actual selling point which is accessibility to affordable long term care (LTC) for anybody from ages 18 and above regardless of health condition.
For as long as an individual is still active at work he can enroll in this program, while students who are 18 years old and individuals with a monthly income below the poverty level will only pay subsidized $5 monthly premiums.
Looking back, everything seems so easy and possible. After a thorough review of this voluntary LTCI program, though, HSS realized that the individuals who will actually take interest in enrolling to this program are those who have either been rejected by a private insurance company due to pre-existing conditions or have realized that they cannot afford the annual premium of a policy anymore because they are too old.
Those who did not show much interest in the closedown of the said federally-supported LTCI program have a genetic predisposition to a serious illness and would need nursing home care someday.
Since the minimum daily benefit amount which the Act had intended to pay its qualified members is only equivalent to a home health aide’s three-hour service, elderly folks who are looking at receiving care in a nursing home never saw it as a good option for LTCI.
Meanwhile, majority of LTCI experts believe that the government has to consider restructuring Medicaid eligibility again now that CLASS Act has folded up since a bigger population will need assistance with their long term care come 2030.