While Congress spent the last year debating how to provide health insurance for the uninsured, a little-known provision slipped into the heath care law that could cost some Americans upwards of $2,000 a year.
The Class Act, otherwise known as the Community Living Assistance Services and Support Act, is the federal government's first long-term care insurance program.
Under-reported and the under the radar of most lawmakers, the program will allow workers to have an average of roughly $150 or $240 a month, based on age and salary, automatically deducted from their paycheck to save for long-term care.
The Congressional Budget Office expects the government will collect $109 billion in premiums by 2019.
Supporters say the program will relieve pressure on Medicaid and should help keep us out of nursing homes by enabling Americans to save for something most will eventually need -- assistance in eating, bathing or dressing in their old age.
Opponents say the provision is little more than a short-term revenue fix that will eventually add to the federal deficit.
"This is a scary proposition where the government passed a huge new entitlement program with gimmicks and tricks and the American people don't know they will be automatically enrolled in it by their employer if they don’t watch out," said Rep. Devin Nunes (R-CA).
Nunes says Republicans were blindsided by the provision because they were unable to see the final bill until the very end. But Democratic supporters say the provision, which was championed by the late Sen. Ted Kennedy, should not be controversial.
"It promotes independence and choice for people who need long-term care, and over time it will help millions stay where they want to, which is at home," says Jim Firman, director of the National Council on Aging.
Scheduled to go into effect in January, actual deductions could take place in 2012.
Here's how the program will work:
-- The federal government will approach employers next year about alerting workers to the proposed deduction.
-- The deduction will work on a sliding scale based on age. Younger workers will be charged less, older workers more. The Congressional Budget Office pegged the average monthly deduction at $146. The Centers for Medicare and Medicaid Services put it higher, at $240.
-- After a five-year vesting period, enrollees who need help bathing, eating or dressing will be eligible to take out benefits, estimated to be around $75 a day for in-home care.
"Seventy-five dollars a day in flex cash will be enough for most people who are at home to stay at home, which is where they want to be," Firman said. "We are convinced a cash benefit is the best way for consumer to get what they want."
While the plan's opponents don't question the need for long-term care, they say the federal government should not be managing it, and they believe the program will eventually add to the deficit.
"This creates a whole new bureaucracy that is going to break this country," Nunes said. "In the early years there will be money in it, but at the end of the day there won't be enough money to cover the problems because there will be too many people in the program."
The statute says the program is designed to be self-sustaining, with an advisory board to assure the fund remains solvent. But opponents say the fine print already tells another story. Unless modifications are made, according to a CBO analysis of the bill, "the program will add to future federal budget deficits in a large and growing fashion."
Supporters and detractors admit much needs to be worked out, and eventually premiums will be based on how many Americans actually sign up for the insurance.
ing Lincoln Brigade.
