Republican Senators Seek Repeal of Long-Term-Care Provision in US Health Reform

Several Republican Senators are seeking to repeal a little-known provision in the U.S. health care reform law that created a government-run long-term care program.

U.S. Sen. Lindsey Graham, R-S.C., introduced legislation to repeal the Community Living Assistance Services and Support Act. Under the program, the government can start collecting premiums next year, according to a statement.

The American Council of Life Insurers urged Congress to exclude CLASS from any final health reform bill. It creates the government-run program that provides an average benefit of no less than $50 a day for long-term care services, such as at-home care (BestWire, March 24, 2010).

Republican Sens. Tom Coburn of Oklahoma, Saxby Chambliss of Georgia, John Cornyn of Texas, and John McCain of Arizona joined as co-sponsors of Graham's legislation, dubbed "The Long-Term Care Bailout Prevention Act."

Separately, U.S. Rep. Charles W. Boustany Jr., R- La., this summer introduced the Fiscal Responsibility and Retirement Security Act, requiring Congress to vote specifically on the fiscal stability of CLASS before it can be put into effect.

CLASS "slipped into health care reform with little notice and it's unlikely it will change at the present," Jesse Slome, executive director of the American Association for Long-Term Care Insurance, said in an e-mail.

Until the most important aspects of the plan are finalized, such as price and qualification for benefits, it's "impossible to predict if CLASS will benefit or hurt private long-term care insurance," Slome said.

Whit Cornman, a spokesman for the ACLI, said his group doesn't have a position on the bills but shares Graham's and Boustany's concerns with the long-term sustainability of the CLASS Act. The same concerns were expressed by the Congressional Budget Office, the U.S. Department of Health and Human Services and others, he said.

Under CLASS, participants would pay a monthly premium to be determined annually by the Secretary of Health and Human Services. The premium is a deduction from take-home pay that would continue -- unless an employee opts out (BestWire, Oct. 12, 2009).

The American Association of Homes and Services for the Aging supports CLASS. The group has said it would will help families and the government save money on long-term care service. It's "far less expensive to care for someone in his home than it is to care for him in a nursing home" (BestWire, March 24, 2010).

The key problem to CLASS, critics have said, is that while it will take in tens of billions during its initial years, once it starts paying benefits, the program may eventually pay more than it receives in premiums. The Congressional Budget Office -- a nonpartisan organization of experts on federal spending -- predicted that moment would arrive in 2029 (BestWire, Dec. 14, 2010).

In alphabetical order, the top 10 LTC insurers in 2009 were Allianz Life, Banker's Life & Casualty, Genworth Financial, John Hancock, Massachusetts Mutual Life, MetLife, Mutual of Omaha, New York Life, Northwestern LTC and Prudential LTC, according to LIMRA.

Attempts to speak with Genworth Financial and New York Life were unsuccessful. Laurie Bauer, a spokeswoman for Allianz Life, said in an e-mail the company decided to stop selling stand-alone long-term care insurance products last November. "This was based on an assessment of the general marketplace and industry sales trends."

The average first-year premium for individual long-term care insurance coverage bought in 2009 was $2,181, according to LIMRA.

Slome said his group estimates the long-term care insurance market is about 15 million people -- with 8 million having coverage already. After CLASS, that segment will still be 8 million, he predicted.

(By Fran Matso Lysiak, senior associate editor, BestWeek: [email protected])