Word: cbo
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Dates: during 2000-2009
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...setting a new national MLR floor is not the end of the equation. The CBO, in its report on the regulations, said insurers might react to new thresholds by "cutting back on efforts to restrain benefit costs through care management." Translation: Anything that doesn't count as "medical costs" may be on the chopping block, including exorbitant executive salaries but also programs to keep patients healthy. There is also a fear among health policy experts that some insurers could raise premiums in reaction - higher premiums means more money spent on health care, but also more left over for profits. Another...
...ripe for mischaracterization. For instance, to prevent people from purchasing long-term-care coverage when they are already in need, the CLASS Act requires that enrollees be employed and pay into the system for five years before becoming eligible to collect benefits. But because the CBO evaluates the costs of legislation - like the Senate reform bill - based on 10-year periods, the CLASS Act - which would begin collecting premiums in 2011 but wouldn't begin payouts until 2016 - appears to generate $72.5 billion in savings between 2010 and 2019. On paper, these savings are used to offset spending...
...opponents are just as guilty of fiscal shenanigans. It's true, as Thune pointed out, that the CBO says the CLASS Act will increase budget deficits in the long term, but that's only because of the peculiar way the deficit is calculated. Premiums collected would be invested in federal securities, and when the interest earned is transferred back to the CLASS Act trust fund, the transaction would be recorded as an increase in the deficit. The Senate bill also requires that the CLASS Act trust fund be solvent over a 75-year period, and the bill would give...
There is still plenty of room for improvement, according to the AAA. The CLASS Act doesn't include sufficient funding to market the program, meaning participation will be low - the CBO says 5% of the population would sign up, the CMS actuary says 2.5%, and AAA says 6%. Such low participation would not allow risk to be spread out enough to keep premiums affordable; in that case, the program could end up in an "insurance death spiral," in which premiums are so high, only those who know they'll need coverage sign up, driving up premiums even further until they...
Paul Van de Water, a longtime CBO analyst and now senior fellow at the Center for Budget and Policy Priorities, says the CLASS Act doesn't have strong enough work requirements, which are intended to be a proxy for physical fitness. Americans who perform only seasonal work, for example, could qualify for the program. He adds that penalties for letting premium payments lapse are not strong enough. "The criticisms are absolutely true, but you design things the best you can. If we only did [legislation] that entailed no risk, I don't think we'd ever do much of anything...