DANIEL AKST: Long-term care insurance plan deserves a trial

By Daniel Akst

In the years ahead, many of the aging baby boomers who once refused to trust anyone over the age of 30 will find themselves so old and frail they’ll need help putting on their bell bottoms and combing what’s left of their hair. That help will be expensive, but few Americans save enough or buy insurance to pay for it when the time comes.
An interesting but little-known provision of the Obama health-care reforms tries to get the ball rolling on a solution. It’s voluntary, and by law isn’t supposed to cost taxpayers anything. If it worked as planned, it could even save quite a bit. And it may be on the chopping block now that Washington is obsessed with cost-cutting.
It’s called the CLASS Act, for Community Living Assistance Services and Supports, and it’s a government insurance program to pay for long-term care. Americans working for participating employers would be enrolled automatically, but could opt out. Others could join separately. Premiums haven’t been set yet, but the Congressional Budget Office projected $123 a month on average, depending on your age. Subsidies would help those too poor to pay the full amount. If you needed long-term care due to disability or old age, you’d get cash for hiring help or even installing ramps at home. Payouts would vary based on your condition, probably averaging $50 to $75 a day – not much, but a lot more than zero. You’d have to pay in for at least five years to collect, so at the outset, for Uncle Sam, it’s all gravy amounting to an estimated $83 billion from 2012 to 2021.
What happens then? That’s a great question, but we’re unlikely to find out, because CLASS is just the kind of worthy program unlikely to survive the current deficit mania. The president’s Simpson-Bowles fiscal commission recommended repealing or reforming the law, and the so-called Gang of Six, a group of Democratic and Republican senators who’ve proposed a budget compromise, want to kill it.
But the need for long-term care isn’t going away just because we prefer not to pay for it. Society is aging, and thanks to a host of factors including less smoking and better health care, more of us will live long enough to need help.
If we don’t plan for this, more and more of the burden will fall on Medicaid, about two-thirds of which already is spent on elderly or disabled adults.
We already spend about 1 percent of gross domestic product on long-term care, just like Germany, France, England and Japan. But unlike those countries, we lack a universal insurance scheme for this purpose, and we spend way more proportionately on costly nursing home care – which most people would prefer to avoid.
You can buy private long-term care insurance, but few Americans do.
Now, I fully accept that CLASS might not work. Healthy young people could opt out, sending premiums and payouts spiraling upward. Mandatory participation would avert this – but that would cause a ruckus almost as bad as suggesting higher taxes on hedge-fund managers.
So the best bet for now is to give the new law a fair shot, which is why it’s much too soon for Congress to say: CLASS dismissed.
Daniel Akst, a columnist for Newsday, is the author of “We Have Met the Enemy: Self-Control in an Age of Excess” from Penguin Press. The column is distributed by McClatchy-Tribune Information Services.