The Gang of Six has no CLASS…

One of the debt reduction proposals being discussed in Washington is from “The Gang of Six” Senators that have been trying to come up with a “bipartisan” solution for the last several months. It’s unclear whether this proposal can get the support of the House of Representatives, but its important to discuss it on its own terms.

It includes many immediate cuts, including $500 Billion in cuts to Social Security, caps on discretionary spending (education, infrastructure, etc.), and other cuts.

Longer-term cuts would include cutting Medicare and Medicaid by as much as $500 billion and arbitrarily capping federal health spending at 1% of GDP plus 1% per beneficiary. The proposal would direct government agencies to find more savings in unspecified cuts.

All of these will have big, and in many cases negative impacts on the nation’s health. It’s more maddening that these cuts are not all going to deficit reduction, but also serve to pay for new tax breaks for millionaires and billionaires by repealing the entire AMT (Alternative Minimum Tax).

One of the more immediate cuts would be the repeal of the CLASS Act, and important long-term care insurance program created under the Affordable Care Act. While in some ways the CLASS Act was a self-contained program, it would be the first significant rollback of policy from the health reform passed just last year, and it would set a dangerous precedent. And on the policy merits, it’s a good program that needs to be implemented–Judy Feder has written at ThinkProgress defending the program and why its crucial for the future:

On the help side, CLASS addresses a huge hole in our social safety net: neither private insurance nor Medicare protects people against the risk of needing extensive and long-term help with fundamental tasks of daily living like eating, bathing or getting dressed. Needing that help is just the kind of catastrophic and unpredictable event for which we need insurance protection. Today, about four in 10 people who need long-term care are under the age of 65. Even among people now turning age 65, the risk is unpredictable; three in 10 will likely die without needing any long-term care, but one in five will require services for five years or more. At all ages, impairment is hard to predict or save for. And, if that impairment arises, the costs of care can be catastrophic: over $75,000 per year, on average, for a nursing home, and close to $20 per hour for care at home. With costs so high and no insurance protection, it’s no surprise that, today, so many people who need long-term care get inadequate help or exhaust all their resources and turn to Medicaid for support.

Although the CLASS program doesn’t address this problem today, it makes it possible for working aged adults to start paying now in case they need help in the future. Under the ACA, people can pay premiums while they’re working and — if they contribute for five or more years (and continue to contribute when they retire) — can collect a benefit if an illness or injury impairs their ability to perform basic tasks. The benefit will be meaningful but limited — an average of at least $50 per day that recipients can use to pay for home-based or institutional services, as they see fit. The benefit is quite basic, providing a core of protection that — along with family care, personal savings or private insurance — can help families cope without becoming impoverished.

Eliminating the CLASS Act before it has a chance, or making significant reductions in Medicare and Medicaid, is simply the wrong direction for our country.

Health Access California promotes quality, affordable health care for all Californians.
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