![]() ![]() When one looks under the hood at the data and analytic models used by Munnell and Hurwitz and by others, it’s obvious that there are big uncertainties regarding the program’s expenditures and enrollment 10 years from now, let alone the challenges it will face 66 years after that. Such 75-year extended forecasts are both necessary and inherently tragicomic. Most recently, Boston College’s Alicia Munnell and Josh Hurwitz produced a concerning policy brief: What is “CLASS”? And will it work? These authors estimate that “an average premium of $194 is required to ensure solvency to the year 2087.” That’s about halfway between the CBO and the CMS estimates. Now, 10 months after health reform passed, some serious budget analysts - including some respected Democrats - worry that projected monthly premiums will prove too low to meet CLASS’s long-term obligations. CMS actuaries predicted that the program would attract only about 2 percent - and this 2 percent would be a sicker and more costly group. Why the difference? The CBO predicted that CLASS would attract about 3.5 percent of the adult population. (For further details regarding CLASS, see this Kaiser Family Foundation brief, as well as Howard Gleckman’s columns for KHN.) Actuaries from the Center for Medicare and Medicaid Services were far more dubious, projecting that the required monthly premiums would be about twice as large. CBO analysts also estimated that CLASS’s average monthly premiums will be about $123. ![]() The success of such measures in minimizing adverse selection - and thus the program’s required monthly premiums - will play a huge part in determining CLASS’s long-term fiscal balance.ĭuring the health reform debate, the Congressional Budget Office gave CLASS a favorable budget score. Most important, individuals become eligible for benefits only after they have paid monthly premiums for at least five years and have been employed during three of those five years. It is a voluntary contribution program, required by law to be fiscally balanced over the next 75 years, with projected costs financed through participant premiums.īecause CLASS is voluntary and does not charge higher premiums based on individual health status, it includes several provisions to guard against the possibility that only people who face high risks of disability will sign up. It is particularly valuable because it provides concrete help for disabled people who wish to remain in their family homes. CLASS - a bold attempt to address some of our nation’s long-term care and disability challenges - will provide participants and their families with daily cash payments for needed support in the event of disability. The new Community Living Assistance Services and Supports program underscores the dangers of political gridlock. In their pursuit of an unrelenting “repeal and replace” effort, health reform critics have created a climate in which the possibilities for bipartisan pragmatic compromise are so limited that it’s hard to imagine Congress implementing a negotiated legislative fix beyond small and obvious matters such as the current effort to abandon the law’s 1099 business reporting requirement. Unfortunately, our currently polarized politics makes it hard to address or even to acknowledge this basic reality. That’s just the nature of overhauling a system that affects one-sixth of the U.S. None of this means that the measure is a bad law, or one that should be repealed. Specific legislative and regulatory provisions will require adjustment once they are tested. The new law will need repairs and fixes along the way. It creates new structures such as health insurance exchanges and pre-existing condition insurance plans.Īmidst all of this change, one thing is certain. It alters the operation and regulation of private and public insurance markets. It transfers billions of dollars down the income scale. Health reform is one of the most intricate and wide-ranging laws in recent American history. ![]()
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