Many of you have asked about the long-term care provisions of pending health care reform. The following comes from Stephen Moses:
LTC E-Alert #9-135: CLASS News and More
Wednesday, November 18, 2009
Seattle–
LTC Comment: Good news and bad news today for CLASS advocates.
Surely proponents of the government-run LTC financing plan will celebrate its inclusion in the Senate’s health reform bill. See “Long-Term Care Plan to Be in Bill” in the Wall Street Journal here if you subscribe online or on page A-4 in the print edition.
But hold off on the celebration because the Chief Actuary at the Centers for Medicare and Medicaid Services (CMS) says CLASS is a dud. See “CMS Actuary: CLASS Act Would Not Work” posted by National Underwriter here. Some excerpts:
“In a report given to House Republicans Friday, CMS actuary Richard Foster says the Community Living Assistance Services and Support Act, or CLASS Act, program provision in H.R. 3962 would bring in $39 billion in new federal revenue during its first 9 years of operation, but then start to fall apart.
“Foster predicts:
- Average premiums for the program would be $180 per month.
- By 2025, the program would start paying out more than it collected in premiums, resulting in a net federal cost.
- Despite assurances of actuarial soundness, there is a significant risk that the program would be unsustainable.
“‘Voluntary, unsubsidized and non-underwritten insurance programs such as CLASS face a significant risk of failure as a result of adverse selection by participants,’ Foster writes in his report. . . .
“‘This effect has been termed the ‘classic assessment spiral’, or ‘insurance death spiral’,’ he writes. . . .”
You can find the full report of the CMS Actuary here. And it’s a doozy going much further than nixing the CLASS Act to lambasting the House’s health reform proposal in general.
Interesting note: CMS Chief Actuary Foster is the same fellow the Bush Administration allegedly threatened to fire in 2003 for disclosing higher estimates for the then-proposed Medicare Part D pharmacy program than management wanted to concede. Nervy guy!
Here’s a summary of Foster’s full report from the NCPA: Daily Policy Digest 11-17-2009:
HOUSE HEALTH BILL WILL HIKE COSTS $289 BILLION
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The House-approved health care overhaul would raise the costs of health care by $289 billion over the next 10 years, according to an analysis by Richard S. Foster, the chief actuary at the Centers for Medicare and Medicaid Services (CMS).
Minority Leader John Boehner (R-Ohio) highlighted the CMS report on Saturday in a written statement. “This report once again discredits Democrats’ assertions that their $1.3 trillion government takeover of health care will lower costs, and it confirms that this bill violates President Obama’s promise to bend the cost curve. It’s now beyond dispute that their bill will raise costs, which is exactly what the American people don’t want.”
According to the 31-page report, the House-passed bill would increase costs, cut Medicare and expand Medicaid:
o For calendar years 2010 through 2019, national health expenditures would increase by $289 billion.
o About three-fifths or more than 60 percent of the uninsured would gain coverage by an expansion in Medicaid eligibility.
o Medicare would be cut by more than one-half trillion dollars ($571 billion), possibly jeopardizing access to care for beneficiaries, and smaller companies would be inclined to terminate their existing coverage.
The nonpartisan analysis demonstrates that the Democrats’ bill “does the opposite of everything they’ve been wanting to do” in terms of reducing overall health costs, says House Ways and Means Committee ranking member Dave Camp (R-Mich.).
He added the CMS report shows that “this is not health care reform, this is entitlement expansion.”
In an interview with The Hill on Saturday afternoon, Camp pointed out that CMS actuarial numbers were cited by Democrats back in 2003 during the Medicare prescription drug debate:
o CMS estimated at that time that the GOP-crafted Medicare bill would cost more than $550 billion over 10 years while CBO estimated its price tag at $395 over the same period.
o The CMS cost estimate did not emerge until after the final conference bill was approved by Congress.
Source: Molly K. Hooper, “CMS: House Health Bill Will Hike Costs $289B,” The Hill, November 14, 2009; and Richard S. Foster, “Estimated Financial Effects of the “America’s Affordable Health Choices Act of 2009,” (H.R. 3962), as Passed by the House on November 7, 2009,” Centers for Medicare & Medicaid Services, November 13, 2009.
For text:
http://thehill.com/homenews/house/67791-cms-house-health-bill-will-hike-costs-289b
For CMS report:
For more on Health Issues:
http://www.ncpa.org/sub/dpd/?Article_Category=16
More from our dear friends in Washington DC!
Here’s hoping you have a great Thanksgiving.