The following 3 articles hit the news Thursday and Friday of this week. The message here: it’s unrealistic to expect the government to be able to pay for long-term care. Long-term care insurance needs to be a core part of your financial planning. 

The total federal deficit is expected to exceed $14 trillion next year – about $47,000 for every US resident.

Medicaid rolls swell by 3.3 million nationwide By Catherine Candisky, Columbus Dispatch. Feb 18, 2010, Between June 2008 and June 2009, Medicaid enrollment rose by 7.5 percent and all 50 states saw increases, according to an analysis released Thursday by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured. Medicaid currently pays for approximately 50% of long-term care in the US.  

States consider Medicaid cuts as use grows By Kevin Sack and Robert Pear, New York Times. Feb 19, 2010 States are already unable to make budgetary ends meet with the influx of Medicaid recipients resulting from the country’s economic woes, yet health care reform could add more than 15 million more people to the rolls. Many states are considering cutting vision and dental care which are considered optional benefits, and some other states are discussing new taxes on tobacco or levies on doctors and hospitals.

Deficit panel: Budget cuts will hurt By Andrew Taylor, Associated Press, February 19, 2010. In a poisonous legislative atmosphere, almost no one is willing to go on the record with budget solutions like raising the Social Security retirement age, ordering broad-based tax increases, or increasing co-pays and deductibles for Medicare. On Thursday, President Obama created the new National Commission on Fiscal Responsibility and Reform, charged with coming up with a plan by December 1, 2010 that will reduce the government’s annual deficits to 3 percent of the national economy by 2015. 

C.L.A.S.S. stands for Community Living Assistance Services and Support.  The CLASS Act has generally been overlooked in the debate over health care reform. It is a bill introduced by the late Senator Edward M. Kennedy, that would establish a national long-term care insurance program.

Stephen Moses, President of the Center for Long-Term Care Reform, attended a Kaiser Family Foundation briefing titled “The Sleeper in Health Reform: Long-Term Care and the CLASS Act” on October 21, 2009 in Washington, DC.

His reporting on the hearing was picked up by “McKnights Long-Term Care News & Assisted Living”. Click herefor the article, which I beleive is absolutely brilliant.

Although the article deals with complex issues, I think it is clear and easy to follow, even by “lay” readers.  If you take the time to read it, you will gain great insight into why long-term care insurance sales lag, as well.

In my opinion, Mr. Moses bursts a lot of bubbles using nothing but facts and common sense.  The presenters appear to be highly accomplished policy people and academics. As far as their understanding of how enactment of the CLASS Act would actually function,  they dwell in a fantasyland  far removed from reality. The CLASS Act essentially proposes government run long-term care insurance. The brilliant presenters clearly lack the necessary business background to understand what it would take to make CLASS viable.