The Congressional Budget Office estimates that premiums for the national long-term care insurance system proposed by Senator Ted Kennedy (D-MA) may be significantly higher than the $65 per month Kennedy aimed for.
CBO figures that for the insurance system to be self-sustaining, premiums would have to be in the range of $100 to $110 per month.
A key question for the Kennedy plan, called the CLASS Act, is how many people would purchase coverage. Under the Kennedy design, people would be automatically enrolled once they started working, but they’d have the opportunity to opt-out. Those who chose to decline coverage could purchase later, although they would have to pay higher age-based premiums.
The CLASS Act would provide a lifetime benefit that averages $50 per day, although the amount would change with the level of assistance a policyholder needed. While the bill sets a premium of $65, it gives the Secretary of the Department of Health and Human Services broad discretion in setting actual rates.
The CBO estimate is roughly in line with an analysis done by a private actuarial firm, The Moran Co., for a similar plan proposed by the American Assn. of Homes and Services for the Aging (AAHSA).