Human Exceptionalism

More Pie in the Sky: Proposed Govt. Long Term Care Insurance Plan

As if we aren’t already spending enough money, legislation has apparently been filed to create a federal long term care insurance plan.  From the story

It creates a national insurance trust that people can voluntarily participate in. It’s a publicly sponsored insurance plan, to make it as low-cost as possible. You pay a monthly premium. If you become disabled and need assistance with activities of daily living [A.D.L.’s] at any age, you can qualify for a daily cash benefit on the order of about $50 to $75 a day, depending on your level of disability.

The legislation doesn’t set specific benefits. The Secretary of Health and Human Services will develop the details. It has to be actuarially sound and self-sustaining.

Well, this doesn’t seem to be it–particularly if the insurance will be voluntary. Most people won’t think about paying into such a plan until they get to be my age and older. The premiums would be about $75 a month and apparently, there would be no underwriting criteria:

[I]t has a vesting period. But one thing it doesn’t have, unlike with private insurers, is a health screen. You would be able to get insurance whether you’re already disabled or had a serious health problem in the past…But it’s a lifetime benefit; it keeps going as long as you have the need.

I am all for long term care insurance. But this one makes no economic sense.  This seems like more of the same fiscal irresponsibility and recklessness we have been experiencing for the last six months.  I mean, do we want half the country to be government bureaucrats?

Still there is the big problem of aging baby boomers who are fast approaching long term care land. But rather than pie in the sky, government bureaucracy, why not follow the Medicare Prescription Benefit formula that seems to have worked quite well?  Create several national plans with different benefits from which people can choose. Require people to sign up when they qualify for Medicare, or pay progressively higher premiums. Provide tax incentives for people to sign up before Medicare age.  Then, let companies compete to enter the long-term care marketplace.  That seems a better, less expensive, and far less bureaucratic approach to a very real problem than yet another government program.

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