Showdown on CLASS

Kathleen Sebelius with the most direct acknowledgment of actuarial problems with the CLASS provisions. She says she has the discretion to make the changes needed to make it sustainable, while others are saying she doesn't. People often criticize legislation for being too vague and granting too much discretion in implementation; CLASS is the opposite, the legislation may have been too specific in some cases. I don't think it is sustainable as it was written, but it could easily be changed to make it so. Basically, it needs a more expansive definition of work and/or an initial underwriting step. The biggest danger with CLASS is self fulfilling prophecy: if various actuary groups say it won't work, then good risks won't sign up and it won't work.

CLASS is an attempt to set up a self sustaining long term care insurance plan, that if successful would make planning for long term care a normal part of being a young adult. Today it is not and that is a large policy problem.

Here are some links to what I have written about CLASS in the past, with lots of background:

• background during health reform debate in the Raleigh News and Observer in Dec 2009.
• More on CLASS in January 2011.
• A January 2010 paper I wrote in Health Affairs on the use of genetic markers as potential underwriting variables for private LTC insurance; has detailed discussion of the reasons people don't now purchase LTC insurance.