The Senate Health, Education, Labor and Pensions Committee package and the House health care reform bill include the Community Living Assistance Services and Supports Act, which would set up a government-run insurance program to provide seniors or disabled people with about $75 per day to help pay for home care or expenses for assisted living or nursing homes.
Introduced by HELP Chairman Edward Kennedy (D-Mass.), the CLASS Act would automatically enroll participants and charge them premiums averaging around $65 a month. Participants would be 18 years or older, but anyone could opt out of the plan.
Supporters say such a plan is a necessary part of health care reform and would not interfere with private insurers.
But companies that currently have a stake in the private long-term care insurance market argue that the government should stay out of that business.
Long-term care insurance should remain in the private sector, said Frank Keating, president and CEO of the American Council of Life Insurers. We dont view it as part of health care, but as asset preservation. The government should not be in the long-term care business.
Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging, supports the CLASS Act. Private long-term care insurance plans are great products for the people who can afford them and who arent disqualified because of pre-existing conditions, Minnix said.
This is all about helping older people and young people with disabilities, he said. What the insurance companies are saying is, Weve got a Mercedes if youre rich enough and can qualify. Otherwise, we dont want you to have a Volkswagen because you should take the bus.
Rep. John Dingell (D-Mich.), former chairman of the House Energy and Commerce Committee, introduced the House CLASS Act, along with Rep. Frank Pallone (D-N.J.), chairman of the panels Subcommittee on Health.
For those functionally disabled who can work and maintain independent lives, this legislation will create incredible opportunities, Dingell said in a statement e-mailed from his office. This bill is both a reflection of Americas decency and its core belief that anyone who wants to work hard and contribute to our society should be able to do so.
A Senate aide working on the bill draws a distinction between private long-term care insurance and the bills intention to cover long-term services and supports. This aide, speaking on background, added that the CLASS Act is not designed to put insurers out of business.
This bill was never intended to compete with the insurance industry, said this Senate aide, who added that the private long-term care insurance market has remained flat, at about 7 percent, over the past 30 years. But it is intended to jump-start their flat market. It would allow the insurance companies to develop entrepreneurial wrap-around products.
Minnix added that insurance companies, if theyre smart, theyll figure out how to start thinking, How do we start selling supplemental products that build on that $50, $75 a day?