- The Washington Times - Wednesday, November 18, 2009

A key component of Congress’ plan to overhaul the U.S. health-care system could become insolvent by 2025, according to a government report.

The component — known as the CLASS Act — is an insurance plan to help the elderly and disabled pay for in-home care rather than using nursing homes. Voluntary participants would have to pay premiums for five years to become eligible for the program’s cash assistance.

But after the first five years of the program, during which the government would collect money and not pay benefits, the program’s finances would decline. By 2025, “projected benefits would exceed premium revenue, resulting in a net federal cost in the long term,” according to the report by the Centers for Medicare and Medicaid, the agency that administers the two health care programs.

The report estimates that roughly 2.8 million people would participate in the program by its third year if it were to be enacted — roughly 2 percent of potential participants.

Although the report did not say the participation rate was low, it said that the 2 percent figure could be attributed to relatively high premiums, new and unfamiliar benefits, and the affordable insurance provided by private companies for long-term care.

The report also found such a low participation rate would require a monthly premium of roughly $180 — about $115 more than estimated for the first year in the version of the reform bill that passed the House of Representatives recently.

To qualify for the program, participants must be incapable of performing two basic life-tasks, such as eating, showering and dressing.

Though the Community Living Services and Support program is included in the House bill that passed earlier this month, it remains unclear whether Senate Majority Leader Harry Reid, a Nevada Democrat, will include it in his chamber’s final version.

The program was long championed by the late Sen. Edward Kennedy, a Massachusetts Democrat.

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