2010 Health Reform includes the Community Living Assistance Services and Supports (CLASS) Act that expands the Federal endorsement of long term care insurance by offering coverage to the general public beginning in 2011.
The Federal Government has long offered Group Long Term Care Insurance to Federal and U.S. Postal employees and annuitants through the Federal Long Term Care Insurance Program (FLTCIP).
As recently as October 2009, FLTCIP benefits were revised to FLTCIP 2.0 to reflect the modern requirements of care and their respective costs. Premiums were adjusted accordingly:
The Federal Government has long offered Group Long Term Care Insurance to Federal and U.S. Postal employees and annuitants through the Federal Long Term Care Insurance Program (FLTCIP).
As recently as October 2009, FLTCIP benefits were revised to FLTCIP 2.0 to reflect the modern requirements of care and their respective costs. Premiums were adjusted accordingly:
FLTCIP 1.0 Automatic Compound Inflation Option (ACIO) to FLTCIP 2.0 Premium Increase
| Age at Purchase |
Percentage Increase |
| 65 and younger |
25% |
| 66 | 20% |
| 67 | 15% |
| 68 | 10% |
| 69 | 5% |
| 70 and older |
no increase |
Critics of the 2010 Health Reform CLASS Act predict the insolvency of the Federal Public Offering as early as 2025 pointing to the plan's expense of adverse selection with the enrollment of already ill and deniable members into the group through it's guaranteed issue provisions.
A November 13, 2009 report issued by Centers for Medicare and Medicaid (CMS) for Health Care Reform Bill H.R. 3296 supports the 2025 date of insolvency.
A November 18, 2009 report issued by the Congressional Budget Office (CBO) differs with CMS not on the point of eventual insolvency but rather, pushes the date out a few years to 2029.
The average age of first claim for long term care benefits is 82, or 17 years from age 65.
It is not surprising that this causes great concern for those aged 65 today and who will likely seek pay-out 17 years from now in 2027 or the average date of insolvency according to the two government agencies.
A November 13, 2009 report issued by Centers for Medicare and Medicaid (CMS) for Health Care Reform Bill H.R. 3296 supports the 2025 date of insolvency.
A November 18, 2009 report issued by the Congressional Budget Office (CBO) differs with CMS not on the point of eventual insolvency but rather, pushes the date out a few years to 2029.
The average age of first claim for long term care benefits is 82, or 17 years from age 65.
It is not surprising that this causes great concern for those aged 65 today and who will likely seek pay-out 17 years from now in 2027 or the average date of insolvency according to the two government agencies.
Expert Advice:
The success of the CLASS Act depends in part on it's revenue and costs.
How many people will participate will be multiplied by how high the premiums will be?
No one knows or agrees.
CMS predicts that the program will fail because premiums will be so high only those planning on disability will enroll which will lead to higher costs requiring yet higher premiums.
The success of the CLASS Act depends in part on it's revenue and costs.
How many people will participate will be multiplied by how high the premiums will be?
No one knows or agrees.
CMS predicts that the program will fail because premiums will be so high only those planning on disability will enroll which will lead to higher costs requiring yet higher premiums.
Class Plans begin collecting premiums in 2011:
Class Plan participation is vital to the success of the program:
Both the CBO and CMS predict inevitable future insolvency.
- CBO estimates premiums to be around $123/month
- CMS estimates premiums to be around $180/month
Class Plan participation is vital to the success of the program:
- CBO estimates that participation will reach 5 million
- CMS estimates that participation will reach 2.8 million
Both the CBO and CMS predict inevitable future insolvency.
- CMS estimates costs will exceed revenues beginning in 2025
- CBO estimates costs will exceed revenues beginning in 2029
