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The Not-So-Class Act
Posted By Tait Trussell On November 1, 2011 @ 12:00 am In Daily Mailer,FrontPage | 2 Comments
We’ve had a damaging demonstration of two related major failures of the current administration: 1. the obstinacy of Barack Obama and 2. the failure of government price setting. They combined in the confusion over a section of ObamaCare called the CLASS Act (Community Assisted Living Services).
The Department of Health and Human Services (HHS) finally decided earlier this month to give up on the CLASS Act. It entailed a voluntary insurance plan to aid the old and disabled to pay for long-term care, including care in a nursing home.
But so attached is Obama to the health-care boondoggles that he can’t bear to part with one that even his own HHS admits is a catastrophe in the making.
It was doomed to fail. This was because of a special form of price control on the premiums. Each applicant’s premiums were set on the “average” applicant’s risk of needing such long-term care. One premium to fit all, as if everyone’s risk is the same in government’s glazed eyes. But, surprise! We’re not all the same.
Because few people with below-average risks would enroll, the average premium inevitably would rise. More people with below-average risks would continue not to enroll until the system eventually would fall apart.
The program’s primary purpose in the law was to pump up financing for ObamaCare. It would have collected premiums for five years before paying any benefits at all. The asinine program initially was to pay for $86 billion of the health overhaul law’s cost.
There was never evidence that CLASS could ever be sustainable. Any analyses on the concept before its passage would have concluded that CLASS was hopeless. The White House, the CBO, and Democrats in Congress all had to know this from the start.
It’s impossible to run a long-term care benefit unless millions upon millions of healthy Americans are forced to pay premiums somewhere up to $200 monthly–for a benefit they don’t want.
If the U.S. Supreme Court upholds ObamaCare’s individual mandate as constitutional and if the president were to be re-elected—God forbid—the administration would undoubtedly revive CLASS and mandate that everyone had to participate. That’s why it is imperative to repeal CLASS in this Congress, Republicans maintain.
Even if premiums were more reasonably priced, Medicare chief actuary Rick Foster said that 230 million Americans–more people than are in the entire American workforce–would have to participate for the system to work.
The House Energy and Commerce Committee scheduled a hearing for Oct. 26 to find out why the administration took nearly two years to admit that CLASS was unsustainable.
CLASS should be repealed in this Congress. It is a microcosm of the problems with ObamaCare. The only reason that ObamaCare pretends to hold together is because Americans are required by federal law to purchase health insurance. If the Supreme Court rules, as it should, that its mandate is unconstitutional, ObamaCare would collapse, just as CLASS has.
Meanwhile, costs continue to rise for those in the U.S. needing long-term care. But the private sector is demonstrating how it can meet the problems far better than government, especially for the more than 5 million with incurable Alzheimer’s disease.
According to a newly released national 2011 Met-Life survey of nursing homes, assisted living, adult day services, and home care costs, national average rates for private nursing home rooms increased to $239 daily. Assisted living rates rose to $3,477 monthly, adult day services rose to $70 a day. Home health aide charges held unchanged at $21 per hour.
“Americans need to discuss long-term care with their families now, to ensure they receive the kind of care they want in the future,” said Sandra Timmermann, director of MetLife Mature Market Institute.
Some 87 percent of nursing homes provide Alzheimer’s or dementia care; of those, 80 percent charge the same rate for this care. Oversight of assisted living communities rests primarily with state agencies rather than the federal government. Several states have strengthened standards for communities with Alzheimer’s disease residents.
Seventy-nine percent of home health care agencies provide Alzheimer’s training to employees and 98 percent don’t charge an added fee for patients with the dreaded Alzheimer’s. Some adult day service centers are open seven days a week. Nearly all centers offer services to Alzheimer’s patients.
Private industry has even come up with a new invention for Alzheimer’s victims. The first shoes with built-in GPS devices — to help track down dementia-suffering seniors who wander off and get lost–are set to hit the U.S. market this month. That’s one of many innovations that ObamaCare lacks.
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