By Jane Norman, CQ HealthBeat Associate Editor
February 7, 2011 -- Health and Human Services Secretary Kathleen Sebelius outlined changes for a long-term care insurance program, included in the health care overhaul law, that has come under fire as financially unsustainable.
In remarks at the Kaiser Family Foundation, Sebelius said she has been meeting with the program's supporters and critics for months to come up with improvements. She called the program "certainly far from perfect," an acknowledgement of criticism by the bipartisan National Commission of Fiscal Responsibility and Reform in its 2010 report to President Obama. Among the commission's recommendations was to revamp or repeal the Community Living Assistance Services and Supports (CLASS) program.
Under the health care overhaul law (PL 111-148, PL 111-152), the long-term care insurance program would be offered by participating employers to workers automatically, though employees could choose to opt out. There would be no underwriting, which means no one could be excluded for a preexisting condition. Participants would not be eligible for benefits until five years after enrolling, and the benefit would be at least $50 a day.
Sebelius said the program needs to be able to attract a broad base of enrollees without discriminating against sick people. She said solvency would be questionable without that broad base, and a first step is to raise public awareness that the program even exists.
People in their 40s and 50s don't think about the need for long-term care "so we have to work aggressively" to drive home the point that they should plan for such needs, she said. The program also has to be appealing to employers and employees and it must be easy for workers to enroll and pay premiums, she said.
The program currently has a cutoff point for earnings above which people are allowed to enroll, but officials are looking at whether to modify that. The agency is also looking at how to ensure that people don't drop out and then re-enroll when they get sick, Sebelius said.
As written, premiums stay flat while benefits would rise with inflation. But there is discretion in structuring premiums, so the agency is looking at options for indexing them so they would rise with benefits, Sebelius said, adding that the system would have to be transparent so no one is surprised by sudden increases.
The program also will have to be tailored to individual preferences, whether people using it are at home or in institutions, she said.
"They're tough goals," she said, but necessary for a strong program.
Sebelius said she would not ask Congress to kill the program, the longtime vision of the late Sen. Edward M. Kennedy, D-Mass. "We continue to believe it has the potential to make a huge difference in the lives of working families," she said. The law provides HHS with the flexibility to make changes that will guarantee the program is fiscally sound while still ensuring it is helpful for the people it's supposed to serve, she said.
The law says no taxpayer dollars will be used to pay for benefits and that won't change, the secretary said. "This is non-negotiable."
Also, there can't be underwriting of the program and it must remain open to any American regardless of health history, she said.
Earlier this month, Sebelius announced she would be putting the Administration on Aging in charge of implementing the long-term care measure. The office would oversee the setup of the voluntary, federally administered long-term care insurance plan; set premiums; set rules for enrollment; and specify and design the benefit.
Advocates say Americans need better choices for obtaining long-term care when needed, though such insurance is often expensive and may not cover much.
