Health Care Thoughts: No CLASS Act
Health Care Thoughts: No CLASS Act
The Community Living Assistance Services and Supports, aka CLASS, was to be an integral part of PPACA (Obamacare), providing a funding source for some part of long-term care costs.
When DHHS Secretary Sebelius declared she would have to fix the program because the poor design was not financially viable, the vultures started to circle. Now it appears the Obama administration is likely to abandon the program, due to the poor design.
Liberals will not believe me, but complexity is the enemy of successful implementation, and PPACA is too complicated to work.
Tom aka Rusty Rustbelt
(I don’t agree with Rusty’s notion that ‘liberals’ won’t agree…comments after the jump)
1. I believe coverage here from Michael Halasy, Run 75411, and Maggie Mahar have acknowledged the difficulties involved in this particular attempt at reform of our health system. Hence I think the statement much too simplistic.
2. Complexity is an integral part of our current private system as well. As a participant in the current practices between hospital associations, AMA, labor, record keeping etc it has become quite a convoluted path for actual contracts that count (not the simplified ‘choices’ in the intro brochures used for ‘pricing’ of insurance premiums that are touted as representing ‘costs’).
3. Current attempts at private market reforms appears to be global payment systems and contraction of labor (one can watch nurse/patient ratios soar…1/4 to 1/7 or 8 in MA as standard), standard work week at 32/hrs and not 40 week and reliance on per diem and even temporaries replacing HR function)
Rdan
I don’t know what “liberal” and “conservative” mean anymore. If conservative means no taxes and no government, it is just insane or stupid. A two year old’s, or teenager’s, understanding of the world.
On the other hand there do seem to be some “liberal” voices who think the solution to every problem is to “tax the rich” to give money directly into the hands of “the poor.” Or to pass a law that is viewed as an intolerable interference with ordinary life, or sets up the basis for a bureaucracy that can be every bit as stupid and insane as the “no taxes no government” idea.
I have been wishing that “liberals” (there is no hope talking to conservatives these days) would slow down and try to get a careful idea of what it is they are trying to achieve, and ten go about it in a way that takes care of the legitimate desire of most people to be left alone, and the reasonable belief of most of “the rich” that it IS their money that they earned through honest work and sometimes creative innovation.
I actually don’t think it can be that hard to do. Social Security is a good example of how it can be done…. the fact is that all of the “trouble” with Social Security is a Big Lie, sadly being reinforced by the “liberals” who take the Big Lie as a starting place for their “thinking” and propose solutions that are exactly what the Big Liars want to see as steps along the way to killing the program entirely.
I cannot escape feeling that the true motive of the Big LIars is hate for people. This probably does not describe the mere idiots who believe the Big Lie, but even with them there is an element of fear and greed that is really a manifestation of contempt if not hate for others.
Didn’t mean to go this far with my basic Rant. but I am reasonably sure that health care could be “reformed” without all the complexity, if we just get clear what it is we are trying to do.
And it is obvious we are not clear, when the Democratic President of the United Stares is proposing fixes that replace the idea of “insurance” with some half assed compromise between “welfare” and the pfree market.
http://www.nejm.org/doi/full/10.1056/NEJMp1106616?query=TOC&
Admin. staffing positions are the primary beneficiary of new jobs, with the already high numbers of docs and nurses in MA covering many more patients. MA has made little real attempts to control costs, but also has instituted already such things as electronic records.
http://www.nejm.org/doi/full/10.1056/NEJMp1110593?query=featured_home
A couple points made worth noting in discussions…items marked as savings in gov spending shifted to consumers may not actually change total amounts spent. There are several real answers as well…cutting is simply one part.
Yes…our lack of conversation on what we want from our institutions and for/from ourselves is carried on in a muddled and devalued way.
Perhaps I should have said the liberals who beat me up on other blogs, and once in a while here.
I predict both PPACA and Dodd-Frank will not realize their potential because the legislation and resulting regulatory activity is too complex to work in the real world.
And that it not a defense of the current system.
I have no way to judge for myself, and at the level you discuss, political idealogy is rather useless in the context of the US debate. But posts of course are often read with idealogy in mind of the reader rather than more “technical” desciptions of problems with any proposed symptoms.
Can you point us to some more comprehensive articles Rusty??
systems…not symptoms.
“Tax the rich” liberals. Well now, I do believe that the rich used to pay more in taxes, and that the country as a whole was in better shape then. Does that make me a “tax the rich” liberal? I’d be very interested to know who these voices are … they aren’t on TV, or in any popular magazines; blogs maybe? Which ones?
Batmensch
I don’t have much problem with taxing the rich. I do have a problem with “tax the rich” as a reflex to every “problem” that suggests itself. And as a person who has put a lot of time into fighting FOR what is generally considered a liberal cause, I am afraid I have seen far too many “tax the rich liberals.”
Dan
doesn’t mean the ideology isn’t there. in fact the arguments of the enemies of Social Security don’t make any sense at all except as ideology. What is currently driving me crazy is the the defenders of SS can’t shake their ideology enough to see a perfectly sensible solution that the Big Liars would have a hard time rejecting, once it was understood by the people.
That isn’t helping with the health care discussion on this thread… but i think you would find with just a little effort at “reasoning together” that you can’t get past the ideology on either side enough to find sensible solutions that work.
Tom/Rusty:
What healthcare plan offered up today is simple?
run
you didn’t ask me, but Medicare for all would be a good simple start… if you could get the people to understand they have to pay for it.
the second step would be using the resources of government to control costs… without detailed bureaucratic oversight. say by opening government run clinics staffed by doctors who had their educations paid for by the government.
can’t say on my own authority that this is a good plan. but it sure looks like a better place to start than hillarycare or obamacare or pay or die care.
I’d still like to know who these “tax the rich” liberals are, especially any that actually ahve some influence.
Back in 2006, IDX founder Rich Tarrant, ran for the Senate seat previously held by Jim Jeffords. (IDX was a large health software company see http://en.wikipedia.org/wiki/IDX_Systems). Unfortunately for Tarrant, running against Bernie Sanders when all you know about is healthcare is a dubious strategic move. Sanders himself really does know a lot about healtcare himself and everyone in Vermont knows it. Tarrant lost by 33 percentage points.
But Tarrant is the only Republican I am aware of (including Romney) who both knows a lot about healtcare and seems to have sincerely tried to craft a long term solution rather than a short term fix or just spout nonsense to the faithful. Here’s Tarrant’s talking point on healthcare.
Unfortunately in America health care costs are rising out of control and threaten to bankrupt the elderly as well as any baby boomers who live to old age. I would encourage a free-market-based system in which the uninsured, farmers, and small business owners have the ability to opt into the Medicare system and are charged a premium based upon their ability to pay. http://ontheissues.org/Social/Richard_Tarrant_Health_Care.htm
So, at least one knowledgable guy who has tried to find a US healthcare solution agrees with you.
The problem with healthcare in the US is that it is simply inadequate to the needs of the nation. Decades of cartelization and oligopoly have choked off supply, and driven up prices. Obamacare does not address this, and is therefore no solution. See:
http://anamecon.blogspot.com/2010/03/real-problem-with-health-care-in-us.html
Unfortunately, no pure market solution is possible, as the market, by its nature,
excludes those least able to pay. Only by the government subsidizing supply, and driving down prices, can the price be rendered affordable for all.
coberly:
Again, What healthcare plan offered up today is simple? Not even Medicare is simple in its structure.
Unfortunately, we did not get the goose which lays the golden egg of single payor or even expanded Medicare Coverage. While the ACA may not be either of those, it represents a large step forward for the US and its citizens in providing a degree of affordable coverage beyond what the MA plan offers.
Since Hillarycare, the healthcare and healthcare insurance costs as driven by the service for fees cost model, big pharma, medical structure monuments, specialties, and the associated industries has increased dramatically (5 or more times over?). As far as simple healthcare, until the cost model is changed the complexity of healthcare will remain such even under Medicare if it ever took hold and was used as the primary provider.
Rusty:
Is it truly the complexity of the Community Living Assistance Services program that will kill it? Or is it an easy target for the deficit hawks to cancel out its good intentions of providing a self funding insurance plan which is not means tested as Medicaid/Medicare is today for those who need assisted or nursing care or other needs to assist them as they age?
CLASS in itself was purported to generate $78 billion in revenues which would contribute to today’s government sponsored healthcare very much like SS and Medicare does now. It was an attempt to provide Long Term care outside of Medicaid/Medicare and not means tested which for many of us sitting here today would fail to pass.
One has to be destitute to qualify today.
VT:
Until there is a major shakeup in Congress, visions of Medicare for all and Single Payor are not even on the horizon. Senators such as Lieberman (the Senator from Aetna) certainly quashed any such move early on in the process leaving us with the 3rd option . . . the ACA
Bat
I don’t know anyone who has any influence. But Bernie Sanders seems to think that tax the rich is the solution to the Social Security problem. Trouble is, there is NO Social Security problem. It’s all a big lie. The workers will get everything they paid for if NOTHING is done about Social Security at all. If the workers are going to live longer in the next generation than the last, they can keep the same retirement age and the same replacement rate (actually an increase in benefits because they are going to live longer with a higher standard of living) by raising their own payroll tax one half of one tenth of one percent per year. No worker will pay more than an extra one percent over a working lifetime.
And to save him what amounts to forty cents per week, Bernie Sanders is willing to destroy Social Security by turning it into welfare because he can’t think of anything except “tax the rich.” And there are a few “defenders of Social Security” organizations that have their heads in the same crack.
And if you read, say Angry Bear, you will frequently run into folks whose reflex to any “problem” is to tax the rich or pass a law.
Since I agree with the left about the need for taxes and government solutions at some times, i hate to see them spoil it by calling for them all the time. Especially when they are being completely stupid as in the case of SS.
Or mostly stupid as in the case of Medicare.
run
i think medicare has been made complicated by misguided efforts to compromise with free markets on the one hand, or welfare on the other.
still, a simple solution right now would be to make Medicare for all. Then we could simplify Medicare.
Greg
i agree up to a point. but a pure government solution, or a complicated bureaucratic solution will have problems of its own.
I don’t think you can subsidize supply and drive down prices at the same time. The best role of government that i can see is using its bargaining power to force down costs and monitor for fraud.
issues about “over treatment” would best be addressed by making available government run clinics where over treatment would simply not be offered. people who wanted cadillac care would have to pay the extra premium… to the private market… and take their chances.
that’s the difference between welfare and insurance. if people paid for their insurance, they could get the treatment they paid for without means testing.
that is doable, but it would take the government to “force” them to pay for their own insurance, and then the government would have to guarantee that they would get that treatment, whatever happened to “costs.”
under pay as you go, higher costs are paid by the following generation which has more money… and which will be in effect paying for its own higher costs… which will not have gone down by the time it is their turn to collect benefits.
“Liberals will not believe me, but complexity is the enemy of successful implementation, and PPACA is too complicated to work.”
Complexity is the enemy of implementation. That’s why lobbyists write complex laws. {grin, I think}
Min
i have sometimes wondered if the laws were not designed to fail. So the loyal opposition, who insisted on all the compromises, could say, “see, we tried that and it doesn’t work.”
CLASS could never work because nobody could price it. Google statements by CLASS’s chief actuary. Ask the actuarial department of Genworth, Met (whoops, Met quit writing long term care policies this year), Prudential, John Hancock, etc. about their long term care book. Nobody can even venture a guess what the long-term tail claims will look like for LTC. In addition there has to be some scale in your LTC book. I mean if CLASS had the same type of enrollment rate as the pre-existing condition pools that have been set up it would be an actuarial joke. And for those supporting Medicare for all (at least in a long term care discussion) you should probably look up how much long term care costs are covered under Medicare.
little john
you could help us out by telling us what you know about “how much long term care costs are covered under Medicare.”
I am speaking of a “system”, not the details of the current configuration of that system.
The Medicare system… as I understand it… is that people pay a premium as a percent of their wages over a whole lifetime of work. That premium entitles them to healthcare after they reach a certain age.. normal “retirement”.
Because it is pay as you go, the premium needs to be high enough to pay the current expenses of those already receiving benefits. Because costs are not likely to go down, those “current” workers, while directly paying for “current” retirees, are also paying… in a perfectly ordinary understanding of money…for their own future needs.
If Medicare is to pay for ALL “expected” medical costs, the premium will need to be high enough to pay for them. That may look like a lot of money to people who are “currently” young and healthy. But they’ll be very glad to have the benefits when they get old and sick. That’s what insurance is for.
Playing stupid games to “cut” benefits, to keep the “tax” low, and then impose the costs on the already retired, or let them go without care, defeats the whole point of insurance, and certainly destroys the value of the pay as you go idea… which allows the following, richer, generation to pay the higher costs of each older generation…. in turn, forever. The young do not bear any burden that is not actually lighter than their own.
Now, if costs need to be cut, that is a very different thing from cutting benefits.
I guess the thing for you to ask… and maybe for someone to help you answer.. is what are the odds that YOU will have high costs associated with long term care when you get old. and what is the best way to pay for that eventuality.
get rich and pay out of pocket? or wait until it happens and count on “the government”?
and please note… make a strong distinction between “the government” and “Medicare/Social Security.” In the former you have a pious hope that someone else will pay for your needs. In the latter you cooperate with your neighbors to pay for your own.
Yeah Mr. C I had to look it up to refresh my memory. Medicare (as long as you’re enriolled in Part B) will pay for the first 20 days of long term care services, after at least a three day hospitalization, then pays a set daily amount of around $120.00 per day for the next 100 days, then that’s it. After these four months paid by Medicare the choice is private long term care insurance, out-of-pocket payements or Medicaid.
In terms of your comment about Medicare being pay-as-you go, that’s great. I don’t understand how pay-as-you-go pays for current workers and the payor’s future needs. Isn’t it one or the other?
Today the odds of any U.S. citizen requiring long-term care services is roughly 40%. In our current system the most cost effective way for ME (I am 47)to provide for long-term care benefits is to buy private insurance. Since Medicare doesn’t provide that specific benefit (except for a very short duration), and I don’t think I am going to be able to fund it out-of-pocket, private insurance is the next best thing. Actually if my employer would provide it it would be much better. The employer gets to deduct it and the benefits are tax-free.
little john
i am unable to see how an insurance company can pay for your long care at much cheaper than it costs times the probability that you will need it times some adjustment for what they can earn with your premium while waiting for you to need the benefits.
since while they are waiting for you to need the benefits they are undoubtedly using your money and other current insurees’ money to payfor the benefits of those currently needing them, i don’t see how that is any different from SS using your “current tax” to pay for “current beneficiaries” and still keeping a record that you “have paid for” your own benefits.
this is not a miracle. it’s just the way money works. no bank, insurance company, stock or bond issuer keeps your money in a drawer with your name on it. it uses your money to pay for current needs, but it still “credits” your account that you have “paid for” your right to have that money paid back according to the agreement that you made with them.
meanwhile “most economists” agree that your employer pays for your insurance with “really your money” (he’d pay it to you if he didn’t have to pay it to the insurance company) so i guess you can thank uncle sam for making it “tax free” because that means uncle sam is paying him back some of the money he would otherwise pay you. a bargain for him. don’t know how you come out on the deal. but with most people the idea of free money is irresistible.
You are advocating “raising their own payroll tax one half of one tenth of one percent per year” because “there is NO Social Security problem. It’s all big lie.” ? Not sure I understand that.
“Liberals will not believe me, but complexity is the enemy of successful implementation, and PPACA is too complicated to work. “
The 2nd statement may or may not be true. But why the first one? Are there, in fact, any “liberals” that prefer complexity to simplicity? I surely doubt it. Just seems like a mean, prejudiced statement of of a talking point.
I like free money but i don’t get enough. I am not a long-term care actuary but I have spoken to some who say they are making money…now. It appears that claims are increasing more quickly than projected. Of course the insurance companies must be listening to you as they will just increase premiums to cover increased morbidity expenses. One item that helps support private long-term care pricing is lapse support. Unlike Medicare or something of that nature, a significant amount of private long-term care policies will lapse. But without getting into a discussion of long-term care pricing, the issue here is the death of a public LTC program. What does that tell us? Is the PPACA too complex or is the cost too prohibitive for the government or for the citizens? I say too costly. Are we going to have a LTC mandate? The actuaries at CLASS had informally floated a premium number of $400.00 per month.
little john:
There is no such thing as free money. Either you pay on the front end or you pay on the back end very much the same way as healthcare insurance is applied today.
“the challenge of financing long-term care is not. Medicaid, which pays more than 40 percent of these costs, is itself in serious financial trouble. And only about 7 million Americans own private long-term care insurance. Yet, more than two-thirds of those 65 and older will need long-term personal care at some point in their lives.” http://howardgleckman.com/blog/?p=273
The estimate for payments are ~$180 month as taken from here: http://voices.washingtonpost.com/ezra-klein/actuary.pdf The plan suffers not so much from the people who will have eligibility after 5 years of enrollment to reap benefits but instead, it needs the healthy people to be a part and paying premiums in order to generate revenues.
“CLASS will produce $39 billion in net federal budget savings by 2019. Premiums are sufficient to meet program obligations until 2025.” http://www.tnr.com/blog/the-treatment/class-act-the-balance
What is your poison? Ignore it hoping for people to die quickly, dream that a better bill will be put forth, or pay on the back end???
bat
he probably didn’t mean it as mean, and he could no more help himself from reciting the “liberals love complexity” meme than most of the rest of us can shake ourselves free of the thoughtless thoughts we have absorbed from out preferred thought-environments. there has to be a reason that southerners vote the way they do. (hint they all read the same newspapers, or at any rate listen to the same radio shows.)
run
i have talked too much here already, but it seems to me that no one understands that if they are going to need (or want) the care they are going to have to pay for it. or find a way to get someone else to pay for it. i don’t think someone else will stand still for that.
i suspect the ultimate solution is to find a way to cut costs.. maybe take a look at what the europeans do. but americans are not going to want to take care of their own elderly, so maybe the politicians are right and we just have to find a way to hide the fact that they are paying for it from the people. shouldn’t be too hard.
lower wages so “the rich” can pay taxes to pay for it, would be my guess, after the country gets over its libertarian fit.
run-The free money thing was a joke. I think Ezra is looking at an AAA-SOA Analysis done of a predecessor of CLASS. According to the CMS PPACA Actuarial Report at pg.14-15 the monthly premium is approximately $240 per month. The AAA-SOA Report does acknowledge that, “premium estimates…are optimistic as they assume a modest level of adverse selection.” Of course it all depends on the benefit level. With all due respect to Ezra and TNR they are just hyping the Act’s promoter’s talking points. In terms of healthy people signing up to generate revenue…good luck. Without underwriting the Act is a huge adverse selection risk which makes the pricing impossible. I think spencer is on to something with a bare bones Medicare-for-all system that has a variety of private supplemental plans that Plan participants can buy to plug the holes.
little john
i am not so sure about those private supplemental plans to plug the holes. unless the holes are for cadillac care that poor people can do without. better i think, to take a hard look at the medical care needs of actual people today… should be easy to do: just count em up.
and then charge a premium to the entire population that effectively covers your personal risk of needing that care… without getting into fine tuning the risks for each person, because that defeats the whole point of insurance: i may be genetically low risk for common diseases, but when the bus runs over me, my care is going to be just as expensive as the cancer patient’s. i am insuring myself against that cost or the cost of some other unknown risk. getting into argy bargy about oo got the biggest piece of burfday cake is just a long step back down the slippery slope to rugged individualism… better known as the law of the jungle which our ancestors evolved to escape.
with pay as you go for all, these questions will sort themselves out… very simply.
where the rub will come in, i think, is when people can’t let go and insist upon six months or a year of intensive care when all hope of meaningful life is gone. that might be left up to those private supplemental plans.