October 23, 2009

Letters to the Editor
The Plain Dealer
1801 Superior Avenue
Cleveland, OH 44114 

To the Editor:

The government-run long-term care insurance proposal (the CLASS Act) in health care reform is unsustainable and would do little to address Americans’ long-term care needs. (“Health Care Proposals Include Government-Run Insurance Program for Long-Term Care,” October 21, 2009).

As designed, the program would provide a $50 daily benefit that would barely cover the cost of care. By comparison, such costs can be as high as $740 per day in Cleveland.

To pay these benefits, the program relies on an erroneous assumption that all Americans will agree to have $120 per month deducted from their paychecks. But as younger workers opt-out, the program will be required to raise payroll deductions in order to maintain solvency. As these deductions increase, more and more workers will opt-out. Eventually, the program would be unsustainable and require an infusion of billions of federal dollars to keep afloat.

This concern is shared by an independent actuarial study that said the program could be insolvent as early as 2021.

Expanding the Long-Term Care Partnership Program (which Ohio and 31 other states have adopted), and facilitating the purchase of long-term care insurance through the workplace are better ways to  address Americans’ long-term care needs than another inadequate, overpriced federal government program. 

Sincerely, 

Frank Keating

Frank Keating is president of the American Council of Life Insurers. He is also the former two-term governor of Oklahoma.