Health Insurance

It appears the Obama administration is abandoning the Community Living Assistance Services and Supports (CLASS) Act, a program included in the Affordable Care Act that aimed to make long-term health care more affordable and accessible for most Americans. In this first video in a two-part Urban Institute package, Program on Retirement Policy Director Richard Johnson walks us through CLASS's aims and design, why greater access to long-term care is needed, and where the program ran into problems.

Every year Americans spend over 182 billion public and private dollars on services and supports for chronically disabled elders. This is projected to nearly double by 2030 to $341 billion and to grow to $684 billion once the last baby boomers have turned 85. And these estimates don't include the $375 billion in unpaid care family and friends provide-including foregone wages that would have helped support Medicare and Medicaid.

Using data from 17,438 elderly Medicare beneficiaries, we estimated the relationship between variations in medical spending and health outcomes. We used instrumental variable estimation to identify the relationships between spending over 3 years and health status at the end of the period. We found a positive and statistically significant relationship between medical spending and improved health, measured in both the probability of survival and an index incorporating overall health status and activity limitations. Our findings imply that across-the-board reductions in Medicare spending may result in poorer health for some beneficiaries, and that more careful identification of unnecessary spending is important.

The Urban Institute's Program on Retirement Policy debuted its Data Warehouse on June 14, 2011. The Data Warehouse is an online resource for retirement-related statistics, which can be used to glean how those in different age brackets are faring and get a look at long-term retirement trends. Its initial data include statistics on older workers and population flows.

Most Americans will eventually need long-term care, which is often expensive and not usually covered by public programs until recipients have nearly exhausted their savings. In 2009, 5.2 million Americans age 65 and older not living in institutions had long-term care needs. Yet, only about 1 in 10 Americans age 55 and older had private long-term care insurance in 2008. Coverage rates were nearly twice as high among those with annual incomes in excess of $100,000. Private insurance covered only 7 percent of the $240 billion in U.S. long-term care costs in 2009. Nearly a fifth were paid out of pocket.

The Community Living Assistance Services and Supports (CLASS) Act, a provision of the landmark 2010 health law, would create a government-run, voluntary long-term care insurance program. To its supporters, CLASS is a major step toward a sustainable financing system for the care of both the frail elderly and younger adults with disabilities. But many experts believe the act's design is deeply flawed. They fear that few consumers will buy the insurance and the program will fail. Can CLASS be fixed? What changes are needed? Our panel of experts will debate various proposals.

CNNMoney.com. Len Burman discusses the health insurance mandate.

Consider an employer who bears an equal cost for their employees and must choose between the proposed subsidy for those on the exchange and the current subsidy for those who get employer-provided health insurance. What are the consequences for the employee? This article discusses the results for the employee under the current health care bills in the House and the Senate.