A group of state legislators have sent a letter to Health and Human Services Secretary Kathleen Sebelius voicing their “grave concerns” over the long-term sustainability of the CLASS Act, a federally backed long term care insurance program.
The letter was sent by the National Conference of Insurance Legislators (NCOIL) which is made up of state legislators, who consider insurance legislation and regulation their main public policy concern. The group supports the goals of the CLASS Act, but believes the program is not financially sound. “The CLASS program risks being under-capitalized on the front end, paying more in benefits than it collects in premiums,” reads the letter. “This will drive rates up and cause adverse selection, as young and healthy consumers will not participate in the market. Also, the plan as currently configured offers little incentive for agents, brokers, and human resources professionals to encourage the enrollment needed to create a broad and stable risk pool.”
Despite recent criticism, the CLASS Act still has its supporters. The Department of Health and Human Services (HHS) has repeatedly declared its commitment to ensuring the program is fiscally sound. The agency is studying actuarial and economic research and discussing these results with actuaries, economists, program and policy experts, and other stakeholders. Groups like Advance CLASS are encouraged by HHS’ recent actions and Congressional Budget Office reports that say the program will reduce the deficit by 83 billion dollars over the next ten years. Not only is the program fiscally beneficial, says the group, the CLASS Act will lessen the burden on family caregivers and give Americans more long term care options.
