January 2 2013
This fiscal cliff "deal" was just classless. Well, literally, CLASS-less. You see, "CLASS" stands for Community Living Assistance Services and Support. It was one of the ten titles on the ObamaCare legislation - the shortest one at only 19 pages - and the fiscal cliff deal repealed it.
The good news is that the program is off the table. It was a horribly designed program... very similar to the rest of ObamaCare, only for more expensive patients (long-term care is generally very expensive) and with no mandate for participation. Now, mandates are anti-freedom, but they are the necessary evil (at least theoretically) to force people to participate in horribly designed programs.
Originally, the CLASS Act was sold as a budget booster. It would "save" us $86 billion because people in the program would start paying premiums (voluntarily) long before they required long-term care. Inside of a ten-year window (as the Congressional Budget Office uses) the projection for the program looked good. But one wise Senator (Judd Gregg) included a provision that required a 75-year actuarial analysis of the program to show that it would be solvent over time. Without this analysis, the program would not be able to be implemented.
And guess what: Of course no analysis, no matter how fantastical, could show the government to efficiently and sustainably manage the long-term care insurance industry.
So the program has been sitting idly by... doing nothing. It was a smart move for Congress to repeal it (even if the rest of the fiscal cliff deal was mostly bad).
The bad news is that Congress apparently cannot just step away from the vehicle. The "deal" included the creation of a "long-term care commission." So apparently lawmakers got the memo that specifically the CLASS Act wouldn't work, but they've missed the larger point that government shouldn't be in the long-term care business at all.
The commission is supposed to "develop a plan for the establishment, implementation,and financing of a comprehensive, coordinated, and high-quality system that ensures the availability of long-term services and supports for individuals in need of such services and supports… and individuals desiring to plan for future long-term care needs." Sounds like your typical Washington-DC panel. Also sounds very top-down.
How exactly, are we supposed to "plan" for a "coordinated system" for everyone in the U.S. who needs long-term care? Why not allow a market to sort this out, where individual actors can find the long-term care insurance and treatments that fit their needs and preferences? A bottom-up approach in other markets is what has brought us innovations galore and previously unimaginable value.
The government is already over-involved in health care at every stage. Medicaid is already involved in the arena of long-term care, and Medicare will usually cover medically-necessary skilled nursing facilities. The government even provides a Web site to help individuals find long-term care and plan for their financial needs.
There's frankly no need for another 15-person government panel to try to figure out and plan the nation's long-term care system. Repealing the CLASS Act was a good move, but Congress should understand the program failed not because of technical difficulties, but because government can never do the job of managing our long-term care. We need a market for that.