Uninsured Rise and the CLASS ACT

In September, the U.S. Census Bureau released their annual report on poverty, income, and the uninsured and the numbers reflect another rise in uninsured Americans.

Here are some highlights from this report:

  • The total number of uninsured rose to 49.9 million, an increase of almost a million Americans in one year
  • The number of uninsured with household incomes over $75,000 totaled 9.5 million.
  • The number of children enrolled in private insurance dropped by 2.8 million, while the number of children enrolled in Medicaid plans rose by 3.5 million, a 15% increase.
We need to work towards promoting measures that contain costs, improve wellness in not only our workplaces, but at home, try to control the number of frivolous lawsuits, and finally expand consumer choice.  The current legislation does none of these items.
The CLASS Act was envisioned to be a voluntary long-term care insurance program providing those paying into it a level of protection from disability costs while increasing the flexibility of how and where benefits are used.  It is intended to do this without a mixture of taxpayer funds or mandates at a low enough cost to make it affordable while still self-sustaining.  There are some design flaws with this part of the PPACA legislation.  The major flaw being adverse selection.  Since this is a guaranteed issue type product, and you only have to be vested in the program for two years, it would attract a fair amount of sick individuals that would need care.  The healthy citizens would have no incentive to buy in now, when they’re young and healthy, and would more than likely delay signing up until care is needed.
Many Republicans, and a growing number of Democrats believe the law should be repealed to eliminate the program and prevent additional fiscal problems.  They even have bipartisan support to repeal this part of the bill.
This was suppose to go into effect January 1st of this year.  As of the writing of this post, we have no idea if this program will be effective anytime soon.  HHS has not made a final decision, but has said they will not start the program until it is deemed financially sound.

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