Ross Schriftman on the CLASS Act

Ross Schriftman is a long term care insurance specialist who is warning against the new government long term care insurance program that he calls inadequate, unworkable and underfunded.  Schriftman cited the “ObamaCare” law as “another government program with serious flaws.”  This section is referred to as the Class Act.

Workers would pay $65 per month out of their paychecks to participate, beginning this year (2011).  The money would be deducted unless an individual requested to opt out once a year.  The government would take the money and create the “Independence Fund” and pay out benefits that will be structured by October 1, 2012.

Schriftman who volunteered his time for 20 years to help get the Long Term Care Partnership program up and running says that the proposal’s benefit of as little as $50 is inadequate. “I can tell you I know from being a care giver for my Mom who has Alzheimer’s the costs are far higher than the benefits being proposed in Congress,” said Schriftman. “This plan would provide so little benefit that if someone needed significant care at home families would end up bankrupt and face foreclosures.”  Schriftman said that his mother’s live in companion service through a home health agency costs $185 per day or $67,525, plus care management services and extra living expenses.  “The cost of 24/7 care is easily $100,000 per year.  What will $50 per day or $18,250 do?” he said.  “I am fortunate.  I planned ahead and bought private long term care insurance for my Mother 18 years ago and it pays a big chunk of the cost for her care.”

Schriftman also listed the following problems with the bill which he has analyzed.  “No one gets any benefits until they have paid into the program for five years,” he said. “The government determines the benefits you get based on your functional loss and not your needs and the government can raid the funds and use it for any other purpose merely by having 60 of 100 Senators vote to do so.  We already have a funding problem with Medicare and Social Security.

Instead of creating a new government fund that could run out of money why not give people tax breaks to buy their own insurance which they own and control.  We should be promoting the Partnership program and a massive public educational program about the financial risks of providing long term care and the need to plan. (See attached testimony) The government should focus on saving the Medicare and Social Security and fulfilling the promises they have already made and are about to break rather than creating another program.

Schriftman added:

Just imagine if a bunch of executives met behind closed doors and created an insurance scheme that will have American workers paying billions of dollars to a fund and not be entitled to any benefits for 5 years.  The scheme promises to pay for nursing and home care for the disabled sometime in the future but the rules for how much sick Americans will actually get in benefits will be determined at the time they get sick by a review board appointed by these executives.  The funds deposited through workers pay checks can also be diverted for other pet projects of these executives if 60% of them agree to do so

Is this something that Wall Street or Insurance Executives have cooked up?  No.  It is the newest and most wonderful proposal that the U.S. Congress has ever developed according to those who support it.  It is called the CLASS Act and it is in the new health care reform bill.  The executives who are promoting it are various leaders of Congress and so called advocacy groups that think the government, by collecting more money from American workers, should pay for long term care services rather than private long term care insurance.  Every concerned American should read the legislation and decide whether they would be better off paying more money into a government fund or owning their own insurance policy to protect against the risk of long term care expenses.


2 Responses

  1. Two years ago a local Special Care Assisted Living Faciity was being closed by the State for 102 health code violations. Rather than loose the desperately needed service and the CON in the area, I purchased it and cured the violations. Since then, it has remained full but to date & there have been NO residents with any sort of “third party payor.” They are all private pay, not by choice. We have had to develop a open dialog with their sponsors and make them understand what “extra” services actually cost and that they will have to pay for them if they want them. This dialog has led to prompt payments and more active volunteers and voluntee activities. Our matgins are not large but they are there and are known by the sponsors. I don’t know if this can be done on a “macro” scale, but it is working well for us now. If new residents came in with a third party payor, I don’t know if this would continue even remotely as it does now. A lesson could be learned for all healthcare forms this personal exposure to costs, etc.

  2. I would add only this to Mr. Chandler’s superb post., and the original from Ross: forget about any tax preference. If you want the government OUT of your business, you need to eliminate the honey pot. For our elected scum the honey pot is always messing with the tax code. Tax breaks are the financial crack cocaine of the great middle class……and all this deal represents is a simple “give away the goods to get them hooked” gambit.


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