Washington, D.C. (July 10, 2009) — American Council of Life Insurers (ACLI) President and CEO Frank Keating today sent a letter to members of the Senate Health, Education, Labor and Pensions (HELP) Committee and Senate leadership, expressing the life insurance industry’s concerns about the Community Living Assistance Services and Supports (CLASS) Act.

In the letter Keating writes, “ACLI supports the goal of the CLASS program to help adults with severe functional impairments obtain the services and supports they need to maintain their independence, while providing them with choices about community participation, education and employment. However, we are concerned that the over 60 percent of Americans who mistakenly believe that Medicare will help them pay for their long-term care needs, will be further misled by a program that will only cover about 12 percent of the total cost of their potential around-the-clock home health needs.”

Now under consideration as part of healthcare reform, the CLASS Act would charge program participants a monthly premium that would be set annually by the Secretary of Health and Human Services. In exchange, participants would receive a benefit for long-term care services of $50 per day.

However, with the cost of a nursing home currently averaging $75,000 annually and home health services running as high as $46 per hour, “the daily benefit of $50 under the CLASS program would not be nearly enough to cover the cost of a full day of these services. In addition, the false sense of security created by $50 per day of inadequate coverage will cause people who can and should plan ahead for their long-term care needs not to take appropriate action.” Keating writes.

“ACLI praises the sponsors of the CLASS Act for seeking ways to address America’s long-term care crisis. However, because the benefits provided under the CLASS Act will not adequately protect Americans who are truly in need of long-term care and we are concerned about the confusion that would be created by offering a government-sponsored long-term care program, the ACLI does not support the CLASS provisions as adopted as part of the HELP Committee’s legislation.

“Long-term care is a serious issue in this country that threatens the financial and retirement security for millions of Americans and we welcome opportunities to engage with lawmakers on more responsible solutions to this growing crisis,” Keating writes.

Download Governor Keating’s letter (PDF). 

###

The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association whose 340 member companies account for 93 percent of the life insurance industry’s total assets in the United States, 94 percent of life insurance premiums and 94 percent of annuity considerations. In addition to life insurance and annuities, ACLI member companies offer pensions, including 401(k)s, long-term care insurance, disability income insurance and other retirement and financial protection products, as well as reinsurance. ACLI's public Web site can be accessed at www.acli.com.