Thursday, February 03, 2011

CLASS(less) or Clueless?

We've written before about ObamaCare©'s new CLASS long term care benefit. While we wait to see whether or not the "legislation we had to pass to see what's in it" is tossed, it seems worthwhile to further dissect this particular piece of it, as further proof that the folks who wrote it have no real-world experiences from which to draw.

John Hancock, one of the major players in the LTCi market, has a neat instructional site that offers interactive tools and in-depth explanations of the CLASS Act; for those who wish more details, the Act itself is available here.

The plan design is pretty simple: there's either no waiting period or a five year waiting period, depending on how one looks at it. Benefits are payable for life ("unlimited"), and family-provided care is eligible for reimbursement. On top of that, the plan's guaranteed issue and, since it's employer-based, premiums are eligible for payroll deduction.

But wait a minute: aren't we supposed to be moving away from employer-based insurance coverage? Oh, well, consistency hasn't been a hallmark of ObamaCare© thus far, why should this be any different?

Enrollment eligibility is limited: one must be at least 18 years old, and one must work for at least 3 years before being eligible to enroll.

But wait another minute: isn't 26 considered "adult" now? Why would a kid buy into this plan? And what about child labor laws regarding 15 year olds?

The benefits are not exactly, um, generous: $50 a day, which may grow (based on the CPI) to a whopping $75 per day. It gets better, though: one must be enrolled for at least 5 years before being eligible for benefits, rendering the "no elimination period" promise worthless.

The good news is that the plan will roll out in 2012.

Or 2013.

Or 2014.

No one really knows, which is encouraging.

And speaking of uncertainty, think about this: a plan that's guaranteed issue, with (ostensibly) no waiting or elimination period and "unlimited" benefits is not exactly a candidate for "most stable rates." In fact, the only real "certainty" is that rates will increase, perhaps quickly and dramatically, as those least able to find real long term care insurance (LTCi) flock to the government plan. Oh, and one more: it's not clear that these plans will be Partnership Qualified, either. Which makes sense: you wouldn't want one government health care scheme coordinating with another one, would you?

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