This is Mike Oxford with another PAS Center Website Legislative and Policy Update.

A little more than a week ago, the "Long Term Care Bailout Prevention Act", S. 3829, was introduced by Senator Lindsey Graham. This bill is also co-sponsored by Senators Tom Coburn, Saxby Chambliss, John Cornyn and John McCain.

The purpose of the bill is to repeal the CLASS Act in its entirety. The reasons given in the bill for eliminating the CLASS Act from the "Patient Protection and Affordable Care Act" (the health reform bill) are as follows:

• According to the National Business Group on Health, only 3% of employers would participate in the CLASS Act
• Even though CLASS is projected to create an initial surplus, by 2025 the cost of benefits would exceed income from premiums and CLASS would run deficits. Financing of CLASS has been referred to as a "Ponzi scheme"
• In general, insurance programs like CLASS face a significant risk of failure due to adverse selection
• Because of these reasons, above, CLASS would go bankrupt causing premiums to drastically increase, or a tax bailout would be needed

Again, these reasons are part of the text of the legislation. The bill goes on to state that "These problems are unacceptable", so CLASS "should be repealed".

We'll also be keeping track of this bill and we'll be bringing updates as they happen.

For the PAS Center Website Legislative and Policy Update, this is Mike Oxford, until next time, signing off.