The long term care insurance industry is gearing up to oppose a provision in a Senate health care reform bill that would create a new LTC services entitlement program.
Both the American Council of Life Insurers and the American Association for LTC Insurance immediately voiced opposition to the provision, and officials of America’s Health Insurance Plans are also privately indicating deep concerns over the proposal.
Specifically, the ACLI said the provision is misleading Americans by telling them it would be sufficient to meet their LTC needs.
In fact, the ACLI said it does not support inclusion of the provision because the benefits it provides “will not adequately protect Americans who are truly in need of long term care.”
Moreover, added Jessie Slome, executive director of the AALTCI, the LTC insurance industry can already provide more coverage for less cost to the average 55-year-old.
Slome said introduction of the proposal means “this is no time for the industry to be silent.”
He said that on the Internet, “millions of people will read that President Obama supports a federal LTC plan and will say ‘I’ll wait.’
“This is a time for the industry to speak out because we have over 8 million policyholders and several hundred thousand people who buy insurance every year and tens of thousands of insurance agents who also want to know what the future means for them.”
The provision is known as the Community Living Assistance Services and Supports Act, or CLASS Act. It was included in the committee print of health care reform legislation unveiled by the Senate Health, Education, Labor and Pension Committee on July 7. It is known as Section 191 of the HELP Committee version of the legislation.
The HELP Committee was scheduled to complete drafting its version of health care reform legislation last week.
Under the scenario outlined by congressional Democrats earlier this year, the HELP panel’s bill was supposed to be meshed with legislation being developed by the Senate Finance Committee this month, and work on both the Senate and House bills completed by early August. That was designed to meet President Obama’s goal to have a bill on his desk by October.
But, the chances of that happening are slipping rapidly. For example, Sen. Kent Conrad, D-N.D., said he doesn’t want the calendar to become the enemy of the legislation and that he believes there would be time after the August recess to come back and get a bill finished.
The LTC provision calls for limiting the average premium to $65 per month in 2011 and indexing it for inflation in subsequent years. Under the provision, the program would be administered by the Department of Health and Human Services.
But Slome says the $65 premium is actually is $780-a-year premium. “By contrast, we just issued our annual prime index, which shows that a 55-year-old would pay $723 a year for a $100 a day benefit.”
That is an average, he said, for a person who is married, where the spouse also buys the same contract, and who qualifies for the good health discount.