CLASS Dismissed?
There’s a lot of chatter in the health policy world this afternoon about whether the Obama administration has given up on the CLASS Act, the health reform’s long-term health insurance program…
Speculation that the Obama administration had given up on CLASS altogether started with an e-mail sent by departing CLASS Act Office actuary Bob Yee. “I’m leaving my position as the CLASS Office actuary as HHS has decided to close down the CLASS Office effective tomorrow,” Yee wrote in an e-mail addressed to his colleagues. An administration official quickly called the CLASS office’s closure “flat out false.” HHS then followed up to say that while the office wouldn’t close, its staff was being reduced.
Sarah Kliff at the Ezra Klein blog.
It was well known that the CLASS Act was not sustainable. HHS actuaries told the Administration this much long ago.
This program was Senator Kennedy’s brainchild. If implemented, it would suffer from adverse selection since there would be no risk rating. People could realize they were losing mobility and then join. As long as they could remain on the job for three years, all they had to do to get an annual benefit worth $25,000 was to pay premiums for two more years. I calculated that something like $7,500 in premiums over five years could result in a $25,000 a year benefit.
CLASS should be dismissed.
The CLASS office isn’t actually closing. They’re just taking a really long lunch.
It’s probably not sustainable. Better to do it now and avoid disappointing millions of people who have come to rely on it for their care.
(wait a minute… this sounds familiar…)