nos-trum. pronunciation: \nos'-trum\. noun. Etymology: Latin, neuter of noster our, ours.
1. a medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness.
2. a usually questionable remedy or scheme.
See here for more discussion.

Tuesday, May 25, 2010

Long-Term Care In ObamaCare, Another Ponzi Program

ObamaCare's perfect "deficit reduction" health insurance plan:  you pay and get nothing...for years.

Part of ObamaCare was a provision that would save $70B by getting people to voluntarily sign up to buy into a long-term care insurance plan for five years--without benefits--then they would begin receiving coverage (and continue paying).  To put it bluntly, you buy the plan, make payments, have a stroke three years later, need long-term care, and you're SOL, because you don't have coverage until the five-year point.

[the program is call the  CLASS Act – an acronym for the Community Living Assistance Services and Supports Act, see here for an analysis]
Such a deal.  As one critic put it, "this is like buying a house and making payments, but you can't move in."

The $70B in "savings" comes from the amounts people pay in for the first five years.  Does that sound like a savings, when the buyer gets nothing, and the costs continue to rise?  I'm not following here...

Long term care is extremely expensive.  a five year jump start on funding is a drop in the bucket, and the program will quickly become a bottomless pit for which there is no solution other than infusion of tons of cash from tax increases.

But it's worse than that.  The $70B in "savings" is already programmed to pay for other parts of ObamaCare, it won't be reserved to fund the long-term care.  Broke from the get-go.

So why was this touted as part of the overall bill's "deficit reduction?"  Remember that the Congressional Budget Office can project out estimates of cost no further than the next 10 years.  With 10 years of people paying into the program, but the first pay-out for coverage beginning after the 5th year, the balance sheet looks great.

This almost deserves double-credit as two Poison Pills in one.

Doc D

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