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How do we ensure long-term solvency for the CLASS program?

March 21st, 2011

By jeremy.engdahl-johnson

We blogged last week about a Congressional committee’s hearing on the CLASS Act.  In his testimony, Al Schmitz put forward several ideas for ensuring the solvency of the new federal long-term care (LTC) program:

On behalf of the Academy, I offer the following recommendations for modifying the CLASS program:

  • An actively-at-work definition with a minimum requirement of 20 to 30 hours of scheduled work or a comparable requirement;
  • Restrictions on the ability to opt out and subsequently opt in with the use of either a long second waiting period for benefits or an alternative underwriting mechanism(s);
  • The use of a benefit elimination period or duration limits;
  • Benefits that are paid on a reimbursement rather than cash basis;
  • An initial premium structure that provides for scheduled premium increases for active enrollees at either a consumer price index or alternative rate.

These modifications, along with an effective marketing effort, will improve the sustainability of this voluntary long-term care program. Without these modifications, the program is likely to be unsustainable.

For more on some of these solutions, check out this post and the related articles.

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  1. March 21st, 2011 at 09:02 | #1

    Thanks for a good post…

    I believe strongly the most important statement in your post was – “along with an effective marketing effort…will improve the sustainability of this long-term care program.

    While information is starting to make its way around in some circles, there needs to be more communication about the CLASS program.

    I appreciate all your efforts in this regard. Thanks again…

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