Free Daily Headlines :

  • COVID-19
  • Money
  • Election 2020
  • Politics
  • Education
  • Health
  • Justice
  • More
    • Environment
    • Economic Development
    • Gaming
    • Investigations
    • Social Services
    • TRANSPORTATION
  • Opinion
    • CT Viewpoints
    • CT Artpoints
DONATE
Reflecting Connecticut’s Reality.
    COVID-19
    Money
    Election 2020
    Politics
    Education
    Health
    Justice
    More
    Environment
    Economic Development
    Gaming
    Investigations
    Social Services
    TRANSPORTATION
    Opinion
    CT Viewpoints
    CT Artpoints

LET�S GET SOCIAL

Show your love for great stories and out standing journalism

Federal officials wrestle with long-term insurance under health reform

  • by Deirdre Shesgreen
  • February 7, 2011
  • View as "Clean Read" "Exit Clean Read"

WASHINGTON–Top federal health officials are designing a new insurance program aimed at increasing the health care options for people with disabilities–and helping them avoid the financial collapse that often comes with severe medical crises.

If successful, the program could also provide much-needed fiscal relief to states like Connecticut, where the Medicaid program, which pays for long-term care for the poor and disabled, is a significant element of the busted budget.

Proponents say the new insurance initiative, created under the federal health reform law, is potentially transformative. But critics say it is seriously flawed and will almost certainly fail. And even as interest groups line up to influence the parameters of the program–the premiums, benefits, and other components–Republicans in Congress have targeted it for repeal.

At issue is the so-called CLASS Act, short for Community Living Assistance Services and Supports.

It seeks to address everyone’s worst medical nightmare: being diagnosed with a debilitating, chronic condition that regular private insurance will not cover over the long term.

Whether it’s multiple sclerosis, Alzheimer’s disease, or a stroke that limits mobility, such conditions can be financially devastating.

“How does the prospect of living in a nursing home at age 50 and beyond after a stroke sound to you?” asked William Minnix, president of LeadingAge, an advocacy group that represents non-profit nursing homes, assisted living residences, and other facilities. “And then after you deplete your assets and sell your house, to leave nothing to your children?”

More and more Americans are facing this desperate situation. Currently there are 10 million Americans who require long-term support services.

“As America ages, that number is steadily rising,” Health and Human Services Secretary Kathleen Sebelius said at a forum on long-term care on Monday.

“By 2020, it’s expected 15 million Americans will need some kind of long-term care services,” she said. “We know that 1 of every 6 who reach the age of 65 will spend more than $100,000 a year on long-term care.”

And yet right now, Sebelius added, those who want to plan for those needs have very few options.

Patients can pay out of pocket, but nursing homes costs about $75,000 a year, and home health aides run an average of $18 an hour. Individuals can purchase private long-term care insurance, but premiums are expensive and few insurance companies even offer such policies anymore.

The third option, which is all-too-typical for many middle-class families, is that they burn through their personal savings until almost nothing is left. Then they’re poor enough to qualify for Medicaid, and the cost of their care is picked up jointly by the state and federal government.

“We have a looming needs situation,” Sebelius said at Monday’s forum, sponsored by the Kaiser Family Foundation. “If nothing changes, we’ll see more and more of [these patients] either forced into a dependent living situation against their wishes or forced to clear out their savings to afford the services and supports they need to live independently.”

Neither is sustainable. Medicaid now spends one-third of its budget–more than $100 billion annually–on long-term care services. That price tag is a particularly tough sell in this current fiscal climate, as governors across the country try to close gaping budget holes.

Enter the CLASS Act, which proponents tout as a revolutionary initiative and detractors say is another federal entitlement in the making.

Under the CLASS Act, which was part of health reform, HHS is now working to establish a federal long-term insurance option-a voluntary program open to working adults, who will pay premiums set by HHS. If they become disabled, the program will pay out a small daily benefit, based on their needs, to cover support services that will allow them to stay in their community.

With lower premiums than a private insurance plan, proponents argue, it will make long-term insurance more attractive to the sick and healthy alike. The benefits will be more flexible than Medicaid, because the consumer controls the spending and can therefore opt for home health services rather moving into a nursing home.

“It’s a long overdue national mechanism that we can use to plan for the future,” said Mercedes Witowsky, a New Jersey advocate for the disabled whose daughter had a massive stroke when she was 16 years old.

Witowsky’s private insurance covered her daughter’s hospital care and some rehabilitation immediately after her stroke. But it would not cover the long-term expenses of having a home health aide help her get dressed, bathed, and through each day. Now 21 and in college, her daughter relies on Medicaid for that care.

Like many, Witowsky, who also spoke at Monday’s Kaiser forum, never imagined she would need long-term health insurance for herself, let alone for her teenage daughter. Only about 7 million Americans currently have private long-term care insurance.

“They either don’t want to think about it or they think ‘I’ve got insurance’ or ‘I’ve got Medicare’,” Minnix said. “People don’t realize the limits of current coverage.”

Medicare doesn’t cover long-term nursing home services. And private insurance usually doesn’t either. Nor does either generally pay for in-home care to help a disabled individual live independently. Even Medicaid is seriously restrictive in its coverage of long-term care.

Minnix calls the CLASS program “one of the most revolutionary” elements of health reform. “More and more families are recognizing that this could happen to anybody and therefore it’s something that’s logical to insure against,” he said.

But critics say the program is poorly designed and will end up costing taxpayers billions of dollars.

“Design problem No. 1 is it will be most attractive to those who need the benefit,” said Douglas Holtz-Eakin, a former director of the Congressional Budget Office and now president of the conservative American Action Network Forum.

If only the sick or disabled buy into the programs, he said, the premiums will not cover the costs of care. He’s also worried that HHS will set the premiums too low to entice participation, therefore shortchanging the insurance fund before it even gets going.

And finally, he said that as participants begin to realize how small the benefits are, Congress “will be tempted to pump up” the program and create a whopping new entitlement program.

Holtz-Eakin doesn’t dispute that there’s a problem. But he said that what’s needed is a more robust private long-term insurance market. Right now, he argues, Medicaid “crowds out” private competitors.

He conceded that there are no easy solutions and the problem is only going to become more acute.

“The bulk of long term care services are donated at this point, typically by family members, mostly woman,” he noted. “And given the demographics–that more elderly are living longer and more women are working–this problem is going to get worse before it gets better.”

He and others are urging Republicans in Congress to target the CLASS Act for repeal, and there are already bills in the legislative hopper to do so.

Howard Gleckman, a resident fellow at the Urban Institute and author of the book, “Caring for Our Parents,” agrees that the CLASS program is not well crafted.

“I worry that relatively few healthy people will enroll, and if that happens that will drive up the premiums,” he said, creating a “death spiral” where only people who know they need it will purchase it, making it “a system that’s entirely unaffordable.”

But repealing the measure is not the way to go, he said, “because then what you are left with is the Medicaid system, which is unsustainable.”

He said that while flawed, the program is a good first step. And if done correctly and improved upon, it will help solve the looming long-term care crisis. For example, he said, if there are incentives for employers to get their workers enrolled, that would be a good way to expand the insurance pool.

In her remarks Monday, Sebelius acknowledged those concerns and said CLASS is “far from perfect.” But as HHS officials begin to set up the program, she said, the agency will use the “ample flexibility” in the law to make sure it’s successful and solvent.

If they don’t, she said, “countless Americans will have to clean out their savings” to get the care they need.

Sign up for CT Mirror's free daily news summary.

Free to Read. Not Free to Produce.

The Connecticut Mirror is a nonprofit newsroom. 90% of our revenue comes from people like you. If you value our reporting please consider making a donation. You'll enjoy reading CT Mirror even more knowing you helped make it happen.

YES, I'LL DONATE TODAY

ABOUT THE AUTHOR

Deirdre Shesgreen

SEE WHAT READERS SAID

RELATED STORIES
Joe Biden takes office: ‘At this hour, my friends, democracy has prevailed.’
by Mark Pazniokas

America took a deep breath and watched Joe Biden uneventfully inaugurated outside a Capitol invaded two weeks ago by rioters.

Lamont to lead NGA task force on pandemic response
by Mark Pazniokas

Gov. Ned Lamont will co-chair a National Governors Association task force on pandemic and disaster response.

Lamont sets the stage for a debate on marijuana taxation by mid-2022
by Keith M. Phaneuf

The governor's draft bill proposes taxing marijuana and erasing convictions for possession that occurred prior to Oct. 1, 2015.

In the grip of a pandemic: What would Dr. King say?
by Suzanne Lagarde MD

No one can dispute that we are in the midst of a history making week —the inauguration of a new President and the departure of a President under the cloud of accusations that he incited an insurrection against American democracy. However, the coming week will prove to be a week like no other in American history for more reasons than what is happening in our country’s capital.

Connecticut’s broad access to internet making at-home work more doable
by Timothy Wilkerson

When it comes to ranking public access to broadband networks, Connecticut has been consistently among the top five U.S. states for over a decade. In 2020, Connecticut topped two lists including best broadband access by BroadbandNow and WalletHub recognized the state as No. 1 in internet access to households as part of their Best States for Working from Home report.

Support Our Work

Show your love for great stories and outstanding journalism.

$
Select One
  • Monthly
  • Yearly
  • Once
Artpoint painter
CT ViewpointsCT Artpoints
Opinion In the grip of a pandemic: What would Dr. King say?
by Suzanne Lagarde MD

No one can dispute that we are in the midst of a history making week —the inauguration of a new President and the departure of a President under the cloud of accusations that he incited an insurrection against American democracy. However, the coming week will prove to be a week like no other in American history for more reasons than what is happening in our country’s capital.

Opinion Connecticut’s broad access to internet making at-home work more doable
by Timothy Wilkerson

When it comes to ranking public access to broadband networks, Connecticut has been consistently among the top five U.S. states for over a decade. In 2020, Connecticut topped two lists including best broadband access by BroadbandNow and WalletHub recognized the state as No. 1 in internet access to households as part of their Best States for Working from Home report.

Opinion The elephant in the Metro-North station
by David Moyer

All over the world, businesses are discussing their revised needs for space as a result of the pandemic. White-collar professionals who have successfully adapted to working from home will have, when they do go to their companies’ offices, fewer of them, with less square footage. Exactly how much is still a matter of debate since the post-pandemic habits of and requirements for in-person face time are still in flux. One thing’s for certain. It isn’t going to increase.

Opinion Separating myth and reality in aid in dying
by Lisa Blumberg

The virus is surging and the death rate is increasing as the already overburdened health system is in crisis. Yet, there is talk of the legislature again considering a bill to permit doctors to provide lethal prescriptions to terminally ill adults requesting them. This is despite the fact that such bills have stalled in committee five times in the past and due to the pandemic, the legislature may meet virtually for much of the upcoming session. Proponents will be talking about choice and compassion. Let’s separate rhetoric from reality.

Artwork Grand guidance
by Anne:Gogh

In a world of systemic oppression aimed towards those of darker skintones – representation matters. We are more than our equity elusive environments, more than numbers in a prison and much more than victims of societal dispositions. This piece depicts a melanated young man draped in a cape ascending high above multiple forms of oppression. […]

Artwork Shea
by Anthony Valentine

Shea is a story about race and social inequalities that plague America. It is a narrative that prompts the question, “Do you know what it’s like to wake up in new skin?”

Artwork The Declaration of Human Rights
by Andres Chaparro

Through my artwork I strive to create an example of ideas that reflect my desire to raise social consciousness, and cultural awareness. Jazz music is the catalyst to all my work, and plays a major influence in each piece of work.”

Artwork ‘A thing of beauty. Destroy it forever’
by Richard DiCarlo | Derby

During times like these it’s often fun to revisit something familiar and approach things with a different slant. I have been taking some Pop culture and Art masterpieces and applying the vintage 1960’s and 70’s classic figures (Fisher Price, little people) to the make an amusing pieces. Here is my homage to Fisher -Price, Yellow […]

Twitter Feed
A Twitter List by CTMirror

Engage

  • Reflections Tickets & Sponsorships
  • Events
  • Donate
  • Newsletter Sign-Up
  • Submit to Viewpoints
  • Submit to ArtPoints
  • Economic Indicator Dashboard
  • Speaking Engagements
  • Commenting Guidelines
  • Legal Notices
  • Contact Us

About

  • About CT Mirror
  • Announcements
  • Board
  • Staff
  • Sponsors and Funders
  • Donors
  • Friends of CT Mirror
  • History
  • Financial
  • Policies
  • Strategic Plan

Opportunity

  • Advertising and Sponsorship
  • Speaking Engagements
  • Use of Photography
  • Work for Us

Go Deeper

  • Steady Habits Podcast
  • Economic Indicator Dashboard
  • Five Things

The Connecticut News Project, Inc. 1049 Asylum Avenue, Hartford, CT 06105. Phone: 860-218-6380

© Copyright 2021, The Connecticut News Project. All Rights Reserved. Website by Web Publisher PRO