Washington, D.C. (
) -- Abortion rights and a public option have made health-care reform the issue of the day. A provision for long-term care, which may benefit insurers including
, has been overlooked.
The Community Living Assistance Services and Supports Act, or CLASS, was originally proposed by the late Sen. Edward Kennedy, and a co-sponsor was former senator and now President Barack Obama. The provision would help give additional care for disabled people who choose to live at home. The Congressional Budget Office said CLASS would cost the government less money than would be paid in for 10 years.
Little is provided for long-term care outside insurance policies from the biggest companies, which include
Mutual of Omaha
Critics, such as Genworth, say the program offers "a false sense of security," according to the
New York Times
. Others say the government would be forced to bail out the program, even though it would be able to increase premiums to avert such a situation. Because of that, insurers would stand to gain new customers, driving up premium income.
Insurers stand to gain whether or not the proposal passes. If it fails, they will be the only game in town. As the baby boom generation starts to need this type of care, insurers can forecast strong demand. If the proposal remains, insurers will be able to offer competing coverage to help meet that demand.
The long-term care provision was almost removed from the proposed bill in the Senate. Despite its merits, the provision may be sacrificed to gain enough votes for health-reform legislation.
Reported by Gavin Magor in Jupiter, Fla.
Gavin Magor is the senior analyst responsible for assigning financial-strength ratings to insurance companies. He conducts industry analysis and supports consumer products. Magor has more than 22 years of international experience in operations and credit-risk management, commercial lending and analysis. His experience includes international assignments in Sweden, Mexico, Brazil and the U.S. He holds a master's degree in business administration from The Open University in the U.K.