Pulling The Plug

This blog has campaigned for transparency, honesty, and basic accounting principles. This isn’t a Democrat or a Republican issue. This isn’t Left or Right. Asking for our elected officials to perform at a higher level may, at times, appear child-like and naïve, but why would we work so hard, investing our time and money, if we didn’t believe that we were trying to help our country find our best leaders?

Flying to New York this past weekend gave me extra time to read. I need to share an opinion piece from The New York Times and a memo from Health and Human Services. This will take a few minutes. It will be time well spent.

Jane Gross, author of A Bittersweet Season: Caring for Our Aging Parents and Ourselves, discussed the last years of her mother’s life in The New York Times. The article, How Medicare Fails the Elderly, detailed the medical care Medicare paid and the hundreds of thousands of dollars of services that depleted the family’s savings. It was brutal. Ms. Gross lays bare the inefficiencies of a system that rewards unwarranted expensive procedures that may more successfully enhance the medical provider’s life than the patient’s. Please read the article. It is a difficult read and there wasn’t a happy ending.

The memo is also about an ending. Kathy Greenlee, CLASS Administrator, sent a memo to the Secretary of Health and Human Services, Kathleen Sebelius, recommending that the program be suspended. CLASS is the acronym for the Community Living Assistance Services and Support Act. Ms. Greenlee was forced to report that there was no logal way to make this program work.

This was not a shock.

The CLASS Act was an important part of the Patient Protection and Affordable Care Act (PPACA). It was important to consumers because it promised to help pay for long term care. It was even more important to the President because, through a bit of accounting sleight of hand, the CLASS Act generated a $70 billion dollar surplus during the first ten years. That money would cover $70 billion dollars of deficit from the PPACA. See, revenue neutral!

Ms. Greenlee was forced to admit that the numbers did not add up. A voluntary program that didn’t have any underwriting couldn’t be actuarially sound the way the law was written. With no public funding available and healthy people not forced to participate, the independent actuaries predicted disaster. Thankfully, the program will be pulled now before any more money is wasted.

The need for long term care planning and the cost of that care are the themes that tie these two readings together. My fixation on transparency is why I have brought them to your attention.

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4 Responses to Pulling The Plug

  1. Noah N. Amesplease says:

    Your a Class Act Dave. Thanks for keeping us up to date.
    Noah N. Amesplease

  2. dave@cunixinsurance.com says:

    This was posted on the original blogspot location:

    Ellen J said…
    Thank you for bringing the articles to my attention. It is pitiful and the aged and aging seniors are bearing the brunt of our Presidents’ (yes, past as well as present) seem to dip into the cookie jar, steel the cookies, leaving barely any crumbs, and not getting caught. What’s worse is the cookies never show up on their thighs!

  3. Breanne Kwak says:

    Thanks for your blog! I really appreciate what you’re posting here.

  4. […] implementing the bill, but there were sources of revenue, too.  The first to disappear was the CLASS ACT, a program that was to pay for long term care eventually but front-load some early money for the […]

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