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The proposed Community Living Assistance Services and Support Act, part of the House and Senate versions of the health bill, could create opportunities for private insurers to sell products that would wrap around government plan benefits.
Constance Garner, a Senate staffer and one of the parents of the CLASS Act provision, talked about how CLASS Act program long term care benefits and private insruance could complement each other during a recent town-hall meeting sponsored by Health Affairs, an academic journal that focuses on health care finance and health care delivery systems.
Garner is majority policy director at the Senate Health, Education, Labor, & Pensions Committee, and she played a major role in helping the late Sen. Edward Kennedy, D-Mass., draft the CLASS Act provision.
“If I were working for the long term care insurance industry, I’d be real smart about crafting wrap-around products like the Europeans have done,” Garner said.
The CLASS Act has been proposed as part of health care legislation now being hammered out in meetings involving Senate and House leaders.
The act would establish a government program offering voluntary long term care coverage for people who are currently employed. Participants would have to pay premiums through payroll deduction for 5 years and work for at least 3 years to qualify for benefits, which would range from $50 to $75 a day under various proposals. Self-employed people or those whose employers do not offer the benefit could also join the program.
The LTC insurance industry would have ample opportunity to sell coverage that protect insureds during the 5-year period before government plan protection kicked in, Garner said. “It will make [LTC insurance] affordable, because you would have the risk pool,” she said.
“What we are saying is that this is about gloving with the insurance industry,” Garner said. “We want to work with them, want to sit and figure out how to make these models much more similar to what you see in France and Germany. They have increased market share [for LTC insurance] 5 times in European countries by doing something like this.”