Pity the supporters of the CLASS Act, the proposal to create a national long-term care insurance system. They are on to an important idea, but they are caught between the proverbial rock and a hard place.

Here’s the problem: much of the congressional support for the CLASS Act is based on the Congressional Budget Office estimate that it will generate more than $70 billion in new revenues over the next 10 years (or maybe $100 billion,depending on how you are counting). That money is a honeypot that many politicians claim they can use to help pay for health reform.

But, if CLASS is to be taken seriously as insurance, there is no windfall. True, the program will take in much more money in the first 10 years than it will pay in benefits. But that’s because the proposal includes a provision for a five-year vesting period. In other words, no one would receive benefits until after they’ve paid premiums for at least five years.

There are sensible reasons for doing this. But if CLASS is going to be real insurance, that money must be invested to pay future claims, not looted by the rest of government to “pay for” health reform.

This is why it is essential that CLASS insurance premiums are walled off from the rest of government. The House and Senate versions of the proposal would hold the money in a Treasury Department trust fund. But, sad to say, this is a grim fiscal joke. That is how Social Security and Medicare are treated, and they have become massively underfunded entitlements. 

So now Senate Democratic critics have joined Republicans in blasting CLASS as a budget gimmick. So supporters are in a jam. They can restructure the plan to better protect premium payments but lose the claim that CLASS will help pay for health care. Or they can go along with CLASS as a cash cow, and both lose support of fiscal conservatives and discredit their own claims that the program is a real, self-financing insurance program. The irony is that fiscal conservatives should be supporting CLASS because properly designed it would reduce the costs of Medicaid, the government program that pays for more than 40 percent of all long-term care costs.

I don’t envy CLASS-backers. It is not an easy place to be. But if it were up to me, on behalf of those of us caring for our parents, I’d opt for real insurance.