The American Council of Life Insurers is pointing to a new study by the Centers for Medicare and Medicaid Services as confirming its view that a long term care entitlement program contained in the latest Senate health care reform package won't work.
In a statement, the ACLI says the proposed Community Living Assistance Supports and Services (CLASS) Act is an "unsustainable program that will add to our nation's deficit and do little to help most Americans address their long term care needs."
Despite criticism from the Congressional Budget Office, Republicans in Congress and LTC industry officials, the provision remains in the Senate bill. The Senate defeated an effort on Dec. 4 to remove it from the legislation.
The CMS study, released Dec. 10, reiterates an earlier analysis that the CLASS Act is a flawed program.
"We believe that there is a very serious risk that the program, as currently specified, would not be sustainable, because of adverse selection," says Richard Foster, CMS chief actuary, in the new report.
The initial take-up rate for the CLASS Act LTC insurance program probably would be just 2%, compared with 4% for comparable private LTC benefits programs, in part because of a relatively high premium for most participants, Foster says.
Only the sickest participants who could not get private coverage would be likely to stick with such an expensive program, he adds.
