CLaSS Conflict
Expanding Long-Term Care
Options in a Tight Economy
BY LIZ SMITH
ROBERT YEE, A VETERAN ACTUARY with math and statistics degrees from the University of California at Berkeley, accepted a job that his pro- fessional colleagues dubbed mission impossible. Yee was hired by the Department of Health and Human Services (HHS)
to build the nation’s first public long-term care insurance program for tens of millions of working Americans. He came to HHS with more than 15 years’ experience as
chief actuary at what is now Genworth Financial Inc. But HHS couldn’t give Yee the
underwriting leverage to exclude from the plan older and disabled workers.
The Community Living Assistance Services and Supports program, or CLASS, was
passed as part of the health care overhaul Congress enacted in 2010. Republicans
earlier this year mobilized to repeal it, saying the plan would buckle under its own
weight. At the time, Yee said critics targeted CLASS prematurely, at least from an
actuarial standpoint.
In late September 2011, Yee packed his things and headed back to San Francisco,
which suggests that HHS decided internally that CLASS was indeed mission impossible. The agency, however, said nothing had changed, other than a reduction in
staffers on the project.
swelling Demand
Long-term care, the daily, physical care of people who can’t
manage to live independently, represents one of the greatest
uninsured financial risks confronting Americans, according to economists and policy analysts. The Affordable Care
Act calls for a voluntary, national program that won’t deny
coverage because of someone’s medical condition or age.
Some 70 percent of Americans will need this kind of
care, mostly in the final years of their life, and the majority
of them don’t have enough savings or insurance to pay for
it. The cost is exerting major financial pressure on Medi-
caid and will grow only bigger in the next decade, driven
by the burgeoning elderly population. The cost of nursing
home care for one individual now averages approximately
$75,000 annually, versus $19,000 for at-home care, ac-
cording to HHS statistics. Private groups have estimated
slightly higher median costs. A 2011 study by Genworth,
which dominates the private long-term care insurance
market along with John Hancock, put median expendi-
tures at $78,000 for nursing homes, the main driver of
