The chief actuary at the Centers for Medicare and Medicaid Services (CMS) says a long term care provision in H.R. 3962, the House health bill, would not be financially viable.
In a report 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.
His predictions:
- Average premiums for the program would be $180 per month (original premium estimates had been in the $50 per month range)
- By 2025, the program would start paying out more than it collected in premiums, resulting in a net federal cost.
“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.
The CLASS Act provision calls for the government to set up a program that would provide a $50-a-day benefit to eligible people who pay premiums for at least 5 years before becoming eligible.
Read more about Mr. Foster’s report here.
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