Thursday, March 17, 2011

Show some CLASS, man!

As we've reported, the Community Living Assistance Services and Supports (CLASS) act, part of ObamaCare©, has some major structural flaws. One of the most critical of these is that it is, to be blunt, unsustainable.

But what does that mean?

The dictionary defines 'unsustainable' as "not able to be maintained or supported in the future," or, as we put it, "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."

But that's only part of the story.

Today, the House Energy and Commerce Committee will begin its own investigation into the program's long-term viability. On the one hand (and as we noted previously), "for several years, program managers would collect premiums for workers without providing benefits."

[As an aside: that seems to be the hallmark of the whole ObamaCare© "model:" pay now, benefits (maybe) later]

So what happens when the older folks, who haven't paid in all that long, start making claims? Well, premiums rise, resulting in classic adverse selection, and ... well, "(a) resulting series of losses, premium increases and decisions by younger, healthier insureds to drop coverage could lead to a death spiral that would kill the program."

And all those premiums paid in?

Well, you know.
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