Saturday, December 5, 2009

Amendment updates

Sens. Reid and McConnell have agreed that all votes will require 60 to one sense making all votes have to overcome a filibuster, but in another sense speeding things up. Notable amendments have been the failure to remove the CLASS Act provisions (a long term care provision) and a failure to stop home health cuts. In the case of the CLASS Act, 11 Dems voted to remove (incl. Baucus and Conrad)....but it takes 60 to put anything in, and 60 to take anything out.

Here is CBO report on CLASS Act from last week. It is in Title VIII of the overall Senate bill....see Table 4, next to last page of this for its budgetary effect in first 10 years by year. Short version is a self funded long term care insurance program that wouldn't cover nursing home care, but is essentially age-in-place insurance....benefits of $75ish per day indexed that is someone to assist in home. Notion is totally self funded plan into which you have to pay premiums for 5 years (3 of which you must be working) before you can claim wouldn't help those now disabled. But, it could make a big change to future LTC landscape. CLASS Act comes from Senate HELP committee and was a pet project of Senator Kennedy. CLASS Act reduces deficit in first 10 by around $73 Billion so is over half the $130 Billion over first 10 in the bill....big disagreements about what it does 30 years out.

My biggest question about CLASS--would it spur innovation in private LTC insurance that would increase letting private companies skip the part of the cover with most moral hazard and focus on nursing home cover only? In one sense this points out trouble for CLASS Act, there will likely be lots of moral hazard for home care, especially that has flexibility in how to purchase benefits as CLASS does. But, if it limits NH admission it will decrease Medicaid costs on the margin....but these benefits may be mostly felt at state ...and the Congress looks at federal budget (of course Fed govt finances Medicaid as well, but seems to focus more on Medicare since states really control Medicaid). In NC NH only policies are banned by state regs....but CLASS would change the landscape. Less than 10% of those 55+ have private long term care insurance. Families now provide most care via informal care.

Howard Gleckman knows as much aobut long term care as anyone and here are his thoughts. The main difference is that CLASS is an attempt to be self funded insurance but using default in/opt out financing via payroll taxes.

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