LTC Bullet:  For CLASS Addicts 

Tuesday, March 1, 2011 


LTC Comment:  If you just can't get enough information about CLASS, today's LTC Bullet is for you, after the ***news.*** 

***  STATES DEMAND more control over Medicaid eligibility.  2/28/11, Kaiser Family Foundation, "Health Law Ups The Ante In State-Federal Medicaid Budget Battle."  This article is a compendium of numerous recent reports about the need to give states more flexibility to rein in Medicaid eligibility and expenditures.  This development bodes well for our recommendations--articulated in recent reports on Medicaid LTC in Pennsylvania  and California available here and in our forthcoming New York reports due out Thursday, March 3--to target Medicaid to those most in need and encourage private LTC financing alternatives like LTCI and home equity conversion. *** 

*** THE COMING ENTITLEMENT TSUNAMI.  Log on and watch the Cato Institute's on-line e-Seminar, Wednesday, March 2, 2011, Noon - 1 p.m. (E.T.)  To participate, go to at Noon (E.T.) on March 2.  There is no need to download any software; no reservations necessary.  Says Cato:  "In the next few years, our major entitlement programs will begin to run major deficits, adding hundreds of billions each year to the debt. Eliminating 'fraud, waste and abuse' is only a tiny starting point. The sad fact is there is simply no way to control our debt without getting serious about extensively reforming entitlements.  Michael Tanner is one of the country's most articulate speakers and policy analysts on entitlements and will be discussing:  needed they can be implemented...what's stopping them from occurring...and the consequences of our not making significant changes now." *** 

*** MULTITUDINOUS DATA AND ANALYSIS (24 pages) culled from numerous sources and published by Leading Age, formerly the American Association of Homes and Services for the Aging (the non-proprietary LTC provider association that helped push CLASS through.) *** 



LTC Comment:  When the top government official responsible for its implementation calls a new government program "totally unsustainable," you know you have a problem.  Unless, of course, you're a Stepford wife when it comes to the CLASS Act.  Here are samples of the latest news and analysis about CLASS with links to more details. 


2/23/11, McKnight's LTC News, "Of admissions, knitting and bandwagons: CLASS danger," by James Berklan:

Quote:  "By Sebelius acknowledging its current form is 'totally unsustainable'-totally unsustainable?!  It hasn't even started yet-she essentially handed the program's numerous opponents all the bows and arrows they might need to finish the job." 

LTC Comment:  Watch Secretary Sebelius's "unsustainable" remarks about CLASS here


2/28/11, National Review Online, "Obamacare and the CLASS Fraud," by James C. Capretta: 

Quote:  "But of all the deceptive arguments and tactics Obamacare's apologists employed to jam their government takeover of health care through Congress, none was more egregious than the CLASS Act fraud." 

LTC Comment:  So, what do you really think? 


2/25/11, Human Events, "Has ObamaCare's Chief Cabinet Member Even Read This Law?," by Congressman Charles W. Boustany, Jr. (R, La.): 

Quote:  "'There is no mandate for auto-enrollment,' Sebelius insisted at a hearing before the House Ways and Means Committee.   

"Yet the part of ObamaCare creating the CLASS program clearly tells the HHS secretary to establish procedures for Americans to be 'automatically enrolled in the CLASS program by an employer.'  Has Sebelius read the law she helped write? 

"The massive new law requires participating employers to automatically enroll all workers in CLASS-unless a worker pays careful attention and takes the time to opt out.  If CLASS were truly voluntary, President Obama would have allowed all American workers to explicitly opt in to CLASS rather than automatically enrolling them.  HHS officials have defended 'nudging' workers into CLASS by 'default,' arguing, 'behavioral economics has frequently smiled on the creative use of defaults.'"   

"Rep. Boustany, a heart surgeon, represents Southwest Louisiana in Congress and is chairman of the House Ways & Means Oversight Subcommittee."  

LTC Comment:  What part of "automatic enrollment" isn't clear to the Secretary?  Read it for yourself.  Go to the following link and search for the germane section:   ''SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS.
''(a) AUTOMATIC ENROLLMENT" in the Patient Protection and Affordable Care Act (Enrolled as Agreed to or Passed by Both House and Senate) [PDF], AKA "Health Reform," AKA "ObamaCare," signed by President Obama on March 23, 2010.  Nothing could be clearer than that CLASS requires automatic enrollment. 


2/27/11, Ross Schriftman's critique follows of Mark R. Meiners, PhD, "Connecting the Long-Term Care Partnership and CLASS Act Insurance Programs," Center for Health Care Strategies, Inc., George Mason University, February 2011,  (LTC Bullets covered Dr. Meiners' article in "LTC Bullet:  CLASS vs. LTC Partnerships:  Allies, Adversaries or Co-Dependents?," Tuesday, February 15, 2011.") 

"I just read your briefing about the Class Act. This government program is not insurance.  The participants will not receive a policy or even a certificate of coverage.  All rights, premiums and benefits can be changed by the government. I don't see American workers taking their hard earned dollars and voluntarily sending them to a government that is $14 trillion in debt.  This same government will determine eligibility for benefits, determine future premiums and decide how much someone will receive, not only based on a 'need' determination but on how much money is in the pool. 

"The workers would be much better off taking the money they would have paid into CLASS and purchasing higher amounts of real insurance.  Those who are already too sick to qualify for Private LTCi can get Medical Assistance like they have in the past AFTER really spending down to qualify (with some tighter rules).  MA is for the poor anyway so I don't see any low income worker putting $5 per month in to CLASS.  They need that money for transportation, groceries and trying to get a higher paying job. 

"I don't see any coordination of benefits between private LTCi and CLASS.  Neither private policy contracts nor the CLASS legislation mentions how this will work.  This, in my view, is a ploy to get LTCi insurance producers and companies to use our resources to promote CLASS since the legislation limits ALL admin costs in the program to 3%.  I for one will not be promoting this program as it is bad for my clients and I have no malpractice protection for recommending someone sign up for Class. (What happens if they pay in for five years and then some government bureaucrat decides they aren't sick enough?  Where does that leave me if I told them it would 'coordinate' with a private plan that I sold them which now isn't enough coverage for their needs?) 

"Finally, the PPACA lists contributions to CLASS as revenue offsetting the cost of the legislation.  If this were true insurance they would NOT be listed as revenue.  They would be listed as premium reserves. 

"This is bad public policy.  AND it will NOT get more people to start doing their Long Term Care Planning.  That was supposed to happen with HIPAA's tax breaks and it was supposed to happen with the Own Your Future campaign and it was supposed to happen after the Deficit Reduction Act passed with the Partnership expansion. Sales are not taking off. Until people really understand that they are at risk (and they are not as long as some government program will step in) they don't start planning.  Only when the Feds and the states run out of money and the public sees people kicked off the government dole will they start do buy the private insurance they need." 

Ross Schriftman is a health insurance agent who has been in business since 1975.  He served as Legislative Chair of the Pennsylvania Association of Health Underwriters from 1994 to 2003 and the Associate Chair for Long Term Care for the National Association of Health Underwriters from 2001 to 2003.  He was the Democratic candidate for State Representative in the 152nd District of Pennsylvania in 2004. 


2/3/11, Congressional Research Service, "Community Living Assistance Services and Supports (CLASS) Provisions in the Patient Protection and Affordable Care Act (PPACA)," by Janemarie Mulvey and Kirsten J. Colello:   

Quote:  "To address gaps in LTC coverage and assist individuals and families in paying for such services, the recently enacted Patient Protection and Affordable Care Act (PPACA; P.L. 111-148, as amended) establishes a federally administered voluntary LTC insurance program entitled the Community Living Assistance Services and Supports (CLASS) program." 

LTC Comment:  This paper incorrectly refers to the CLASS program as "insurance."  Insurance spreads and prices risk.  Based on actuarial science and careful underwriting, insurance assigns premium levels commensurate to the level of risk that each insured brings into the risk pool.  CLASS spreads risk, but does not price it.  Without a means to underwrite participants based on the level of risk they bring to the risk pool, CLASS operates as a mechanism to charge low-risk people more in order to support higher-risk people at less than cost.  In other words, CLASS is not insurance.  It is welfare.  For a fuller explanation of the difference between true insurance and "social insurance," aka welfare, see my article "The Inherent Individualism of Insurance," Navigator, November/December 2002. 


2/10/11, Congressional Research Service, "Factors Affecting the Demand for Long-Term Care Insurance: Issues for Congress," by Janemarie Mulvey:   

Quote:  "A number of factors have adversely affected the demand for LTCI. The cost and complexity of LTCI policies have been cited as major deterrents to purchasing LTCI. In addition, increased concerns have arisen about the adequacy of consumer protections for LTCI as a result of inconsistencies in LTCI laws and regulations across the states. More recently, adverse publicity about premium increases and heightened concerns about the future solvency of LTCI insurers in the current economic environment have further dampened demand." 

LTC Comment:  This analysis totally ignores the dominant reason demand for LTCI remains low, i.e., the government pays for most expensive nursing home and home care through Medicaid and Medicare.  And the government pays not only for the poor, but for many who could, should and would have paid privately.  In the absence of these "safety net" programs which have become "hammocks" for the middle class and affluent, many more Americans would have purchased LTC insurance or used home equity conversion to pay for their long-term care. 


*** THE CLASS CONTENT covered in today's LTC Bullet has been added to our Members-Only Zone website here:, exclusive for Center members.  Not a member yet (you should be if you’re receiving this)?  Need to renew?  Need a refresher on your username and password?  No problem.  Just contact Damon at 206-283-7036 or  Center membership is only $150 per year for individuals or $12.50 per month and gets you access to The Zone and allows you to receive our daily LTC E-Alerts and LTC Bullets by email. Corporate memberships are also available. Support the Center's research and advocacy on behalf of rational long-term care public policy and responsible LTC planning. ***