| The Community Living Assistance Services and | | | | insurable for the benefit of the uninsurable. |
| Supporters Act (CLASS Act) signed into law by | | | | The program will be promoted as a program for |
| President Obama is a very exciting development in | | | | chronically ill seniors as well as for the working disabled. |
| terms of helping more Americans plan for the risk of | | | | CLASS benefits, even if they are paid at something |
| needing costly long-term care. | | | | approaching the most optimistically anticipated rates, |
| Many details regarding the CLASS Act are not yet | | | | hardly will make a dent in the cost of long-term care |
| defined and will be developed through Government | | | | for the elderly. |
| regulation but here are some known facts that can | | | | The government program has no underwriting, which |
| help you decide if this is a good option for you. While | | | | means there is no price put on the level of risk each |
| the following may seem primarily negative, CLASS | | | | participant brings into the program. Some will pay more |
| offers an excellent benefit for those who are disabled | | | | than their level of risk would otherwise require so |
| and are low-income wage earners. | | | | others can pay less and take out more than their level |
| First, while some reports talk about the program | | | | of risk objectively justifies. |
| beginning in 2011, this is very unlikely. Work on the | | | | CLASS has subsidized premiums, as little as $5 per |
| CLASS Act began well before health care reform. It | | | | month for the poor. The non-poor will pay higher |
| was actually first started in 1993. It is far more likely | | | | premiums to make up the difference. This is not true |
| that important details will not be determined until late | | | | with insurance where income has no relationship to the |
| 2012. Employers will start offering the plan in 2012 and | | | | cost. |
| 2014. The first benefits won't be paid until one pays | | | | Finally, the program is not a contractual agreement. |
| into the plan for at least five years (so 2018 at the | | | | The costs and rules for receiving benefits can be |
| earliest). | | | | changed at any point by the Department of Health and |
| While many reports talk about CLASS as a voluntary | | | | Human Services. CLASS joins a long chain of |
| plan, every worker is involuntarily and automatically | | | | unfunded entitlement programs as its weakest link. |
| opted into the program. Each employee or | | | | Medicare is under water $89 trillion and Social Security |
| self-employed person must willfully opt out to avoid the | | | | $17 trillion, not to mention the unfunded liabilities of |
| program's large premiums that will otherwise accrue | | | | federal, state, local and private-companies' pension |
| by default. | | | | systems. |
| CLASS is not insurance and it is not really designed for | | | | Everything in CLASS depends on a final decision by |
| healthy people who want to prepare responsibly for | | | | whoever is secretary of the Department of Health |
| the relatively small possibility they may become | | | | and Human Services when CLASS claims come due. |
| disabled or chronically ill. CLASS is more accurately | | | | If CLASS is broke, the secretary can change virtually |
| described as pre-payment of care subsidized by the | | | | anything and everything to fit the funds available. |