There is a new long term care entitlement in the current healthcare reform bills in both the House and Senate.
The long term care provision is known as the Community Living Assistance Services and Supports Act ("Class Act").
The Class Act is projected to run a surplus during its first few years of existence, but will be in deficit within 10 years.
This budget projection excludes the present value of the program's future liabilities--in other words, the type of accounting that any private insurer would be required to conduct and reflect in its financials.
Incorporating realistic accounting would reveal the full impact of the new entitlement on the U.S. deficit. Moreoever, the projected "savings" from the Class Act program's first few years of existence are incorporated into the deficit impact scenarios of the healthcare bills. As a result, proper accounting for the new expense would have an unfavorable impact on the budget aspects of proposed health reform bills.
Source: Wall Street Journal
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