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Daily Archives: September 1, 2010

Diminishing Apathy

Thanks to those of you who have sent emails or posted comments in response to my Apathy post. Hearing nice things never gets old. Also, a few of you made some good suggestions that I plan to follow up on in the next week or so. These include changes to the format of the blog that will hopefully encourage more commenting. I welcome additional suggestions about the blog:

  • What do you like about it?
  • What do you dislike about it?
  • What one thing would you change if you could?

Others told me that they don’t comment because they “are still learning” or “don’t feel informed.” Granted, one of the primary purposes of this blog is to reach out to a more general audience and help them to understand some of the complexities of health policy and health services research and their implications. So it makes me happy to know that there are people reading the blog who fall into the category of “here to learn.” But I don’t want to always set the agenda for the material to be covered. So, I want to turn it over to you all for a while:

  • What questions do you have about health policy?
  • What do you want to know about our health care system?
  • What are your concerns about health care reform?
  • What do you want me to write about next?

Okay. With that housekeeping out of the way, I have received a few more responses to the opportunity cost multiple choice question. Nobody has the correct answer yet. Not even by guessing. One of the reasons for that might well be, as one commenter indicated, that I did not explain what opportunity cost is all about. Please excuse my oversight in that regard. Sometimes I take things for granted that I ought to explain. And so, in the interest of space, I point you to my good friend Wikipedia to tell you what opportunity cost is all about. Give that a read and then try to answer the question again (or for the first time). Oh, yes, someone also asked me why they should care about opportunity cost. The answer to that is simple: So you learn how to think through your actions and stop spending your time and money unwisely.

 
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Posted by on September 1, 2010 in Uncategorized

 

A Real CLASS Act

You probably don’t know anything about the Community Living Assistance Services and Supports Act (CLASS). I didn’t until recently. The act essentially creates a voluntary new federal long-term care insurance. It would basically work in much the same way that Medicare and Social Security do–through payroll deduction–with the major distinction that those programs aren’t voluntary and CLASS is.

Before CLASS, there were only three ways to finance long-term care. You could pay for it all yourself, you could have a private long-term care policy, or Medicaid would pay a portion of your long-term care costs. The problem is, very few people have the ability to pay for their own long-term care, and an equally small number are forward-thinking enough to purchase long-term care insurance far enough in advance for it to be affordable. That leaves most people in the position of “spending down” their resources to get Medicaid eligibility. In other words, you are forced to deplete most of your savings and other assets before Medicaid will pick up the tab for your long term care. The law allows your spouse to keep your primary residence, and some money may be reserved for your and their living expenses, but beyond that, you can expect to be poor before Medicaid becomes an option. In the past, some people have tried to get around these laws by giving money to their children, putting their assets in someone else’s name, or the like, but the Feds have been cracking down on that practice for a while, by increasing the “look back” period–they actually look into your records to see if you were dumping assets in anticipation of becoming Medicaid eligible, and they penalize you for it if they find such evidence–by barring you from the program for a considerable length of time depending on the value of the assets you unloaded. That makes all three long-term care options less than stellar.

Enter the CLASS Act. Now, just like Medicare, CLASS is designed to be a valuable–but not entirely sufficient–product. Sure, Medicare Part A covers hospital stays, but if you want coverage for doctor’s visits, you’ll have to pay the Part B premiums, or even get a “Medi-gap” policy to cover those things that Medicare doesn’t cover. The same is true of CLASS. It will cover a good portion of your long-term care costs, but you’re still likely to end up paying some portion out-of-pocket or needing a private long-term care insurance policy to supplement CLASS. To some, that may sound like CLASS isn’t worth it. Here’s why that’s not true:

CLASS has enormous potential to be an affordable means of long-term care insurance–thanks to the power of risk-pooling–provided that enough people opt to enroll in the voluntary program. The fact that it is voluntary–unlike Medicare, which is compulsory–may be its biggest weakness. Young people are prone to thinking about anything but their mortality, which explains why so few of them purchase private long-term care insurance, and are not likely to have CLASS premiums deducted from their paychecks. That’s unfortunate, and I hope they prove me wrong, because financing long-term care is–and will remain–one of our country’s biggest health care challenges for the foreseeable future.

Note: For more on the CLASS Act, read this piece by Judith Feder, Harriet Komisar and Paul Van de Water, which appeared in a recent issue of The American Prospect.

 
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Posted by on September 1, 2010 in Uncategorized

 
 
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