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November 17, 2009 at 07:00 PM
WASHINGTON BUREAU — The chief actuary at the Centers for Medicare and Medicaid Services says a long term care provision in H.R. 3962, the House health bill, would not be financially viable.
In a report given to House Republicans Friday, CMS actuary Richard Foster says the Community Living Assistance Services and Support Act, or CLASS Act, program provision in H.R. 3962 would bring in $39 billion in new federal revenue during its first 9 years of operation, but then start to fall apart.
Foster predicts:
- Average premiums for the program would be $180 per month.
- By 2025, the program would start paying out more than it collected in premiums, resulting in a net federal cost.
- Despite assurances of actuarial soundness, there is a significant risk that the program would be unsustainable.
“Voluntary, unsubsidized and non-underwritten insurance programs such as CLASS face a significant risk of failure as a result of adverse selection by participants,” Foster writes in his report.
One of the reasons for that, he writes, is that individuals with health problems or who anticipate a greater risk of functional limitation would be more likely to sign up than those in better-than-average health.
