A Not So Class Act
Included in health care reform legislation on Capitol Hill is the Community Living Assistance Services and Supports (CLASS) Act. Workers would have money automatically deducted from their paychecks every month. In exchange, they would receive in the future a $50 to $75 daily benefit for home-based long-term care, far below the $190-a-day average nursing home cost. As Frank Keating writes in USA Today:
The program amounts to little more than an unfunded entitlement program that would add to our nation’s deficit…. The non-partisan Concord Coalition said the CLASS Act would eventually require an infusion of government revenue to maintain its solvency. Meanwhile, a joint analysis by the American Academy of Actuaries and Society of Actuaries concluded that the program could be insolvent as early as 2021.
Senator Kent Conrad is more blunt: It’s “a Ponzi scheme of the first order.”
This would be a foot in the door to a big, big Ponzi scheme.
This is a truly awful idea.
I wonder which criteria would be used to approve benefits? With long term care insurance, to receive benefits seniors must become institutionalized. That’s something no senior wants — thus few are willing to draw benefits unless they have to.
However, every senior probably believes they would benefit from a little home-based care (who wouldn’t want in-home help with cooking, cleaning, bathing, etc.). The government has never been good at utilization management (just look at Medicare spending). I would expect utilization of home-based services to skyrocket as seniors seek to draw benefits earlier than clinically needed.
What’s one more Ponzi scheme. The government is very skilled at running Ponzi schemes.