Contained within health care reform legislation is something called the CLASS act, a program similar to long-term care insurance that provides assistance in the home for seniors unable to perform the normal functions of daily living. The program is voluntary and about ten million seniors are expected to sign up over the next decade. Monthly premiums have been bandied about from $65.00 per month to $123. Once you enroll in the program, you have a five-year waiting period before collecting benefits. This delay in benefit payments is one of the controversial aspects of deficit reduction because Congress claimed $70 billion from this program to offset health care reform despite the fact that the $70 billion will eventually have to pay the accumulated claims. The Congressional Budget Office has predicted that eventually this program will add to the deficit and already it is being projected that the program will cost more than estimated. Democrats claim the premiums will always be self-sustaining which means of course that premiums will rise as the participation and utilization rise. Let’s hope the premiums never get to the level of “unaffordable.” Surely, I jest.
Early Retiree Reinsurance
Another aspect of health care reform is a $5 billion reinsurance program for early retirees. Under this program an employer can be reimbursed for certain health care expenses if those payments are used to lower costs for the retiree health benefits plan. Already we are hearing that the $5 billion may not be enough money (not sure how one comes to that conclusion since this is a windfall designed to keep employers in the health care game for early retirees). At least one member of Congress has indicated they will monitor the program and evaluate the need for more money. Perhaps they can extend the five-year wait on the long-term care insurance to seven years and get more money from Peter to pay Paul.
These early hints simply emphasize what those of us who are critical of this version of reform have been saying. The costs are understated or unknown and unfunded and most important Congress will never be able to keep hands off and not adjust the costs even higher during the next ten years. Both of the above examples are new entitlements, one for all Americans and one for corporations with direct transfer to Americans age 55 to 65.
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Find somewhere else to put that thing, and don’t raise my taxes while you are at it
People do not want a high voltage power line running through their backyard even if it means more reliable and cheaper electricity and they do not want to lose a new entitlement even if it means more debt and higher obligations and taxes for their children and grandchildren.
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