It’s an ironic statement, given that “children and grandchildren” often go bankrupt trying to meet their’ parents long-term care needs. Since Medicare does not provide long-term benefits, Americans spend more than $200 billion a year on services in nursing homes, at home, or in assisted living facilities. Impairment is impossible to anticipate or save for (about four in 10 people who need long-term care are actually under the age of 65), and families rarely purchase private coverage or falsely assume that Medicare will cover their needs. As a result, families spend down to “$2,000 in financial assets” to qualify for long-term care under Medicaid. The program is now the largest single provider of long-term care — it spent more than “$100 billion last year, over one-third of its budget” and “paid more than 40 percent of the nation’s total long-term care bill.” By mid-century, the Congressional Budget Office (CBO) predicts that Medicaid will swallow 16 percent of anticipated federal revenues to fund care for the baby-boom generation.
CLASS, originally championed by the late Sen. Ted Kennedy (D-MA), sought to fix the system by establishing a national insurance program financed by voluntary payroll deductions from employers who agree participate in the benefit. Workers who pay into the program for at least five years, would receive at least $50 per day that could be used to pay for home-based or institutional services. But from the very beginning, economists worried that CLASS would have a hard time attracting healthier applicants and eventually pay out more in claims that it would collect in premiums. Secretary of Health and Human Services Kathleen Sebelius had responded to the criticism by reassuring Congress that “the program will not start unless we can absolutely be certain that it will be solvent and self-sustaining into the future” — a promise that she is intent on keeping.
But lawmakers can only deliver on the promises of long-term health care coverage if Democrats insist on making the program work. And therein likes a unique opportunity. The CBO has estimated that CLASS will reduce the deficit by $83 billion over 10 years. Republicans and Democrats who are truly interested in lowering costs — and national health care spending on long-term care — have an incentive to adopt legislative changes in the super committee that would the sustain the program for the statutorily required 75-year period. Judy Feder, Harriet Komisar and Paul Van De Water have laid out several legislative options for how to help the voluntary program attract enough healthy enrollees and lawmakers can look to them as an important starting point. The options include: 1) indexing benefits to inflation to make the coverage more attractive to younger workers, 2) tightening the eligibility requirements to “screen out people who already have serious functional impairments,” 3) increasing penalties for late enrollment, 4) appropriating more funds for marketing the program to younger workers.
Politically, Republicans see the possibility of eliminating CLASS as an opportunity to deal a severe blow to the President. But in reality, they would only be accelerating to the country’s long-term care crisis and reinforcing the belief that mandates are necessary for establishing balance in health care risk pools.