It’s sad that it took the demise of the CLASS Act for the media to take notice that the problem the measure was trying to solve, long-term care, is both serious and growing.

But whether or not the CLASS Act comes off the books, the problem it was meant to address remains: A gap in the health care system is swallowing up the savings of a growing number of seniors and increasing pressure on Medicaid, the program that usually pays for long-term care.

And the near-term outlook for improving access to long-term care is bleak.

“CLASS was the one big idea out there, and I don’t think there’s another one waiting in the wings,” said David Certner, legislative policy director for the AARP, which is not good, he said, because “the unmet need is huge.”

About 20 million people, including more than two-thirds of people over age 65, are expected to need long-term care at some point in the coming years, but only 7 million have private insurance to cover it.

The number of people with such insurance has remained roughly flat for at least the past four years, suggesting the limits of the private market’s ability to fill the need.

The CLASS Act, in many respects, was a program that extended the life of Medicaid – and Medicare, in a way. Medicaid, already under threat of cuts from federal budget trimmers, will face increasing burdens from long-term care if the private market sees the opportunity to offload costs. Long-term care insurance simply doesn’t have much of a payoff to private industry. And if that market just collapses, you’re going to have so much unmet need for long-term care that there will be a clamor for the easiest fix, to simply incorporate it into Medicare. And that will take years off of Medicare’s life.

The positives of that outcome would be to consolidate long-term care under one program that can then bring down provider prices. Another way to handle this would be to get everyone into an insurance program for long-term care, so that benefits can be paid out at decent levels without forcing the patient to divest themselves of all their money to qualify for Medicaid coverage. If people are signed up early enough, there would be enough money in the pool to provide those benefits. And if this gets routed through community care rather than Medicaid, it relieves the burden on that program, making the funding crunch less troublesome.

Hey, that sounds like the CLASS Act!

Don’t expect the private market to take care of this one. Met Life just abandoned the long-term care business last year, and I’d expect others to follow. There’s no doubt that there’s a serious gap here, and as the baby boom generation starts requiring long-term care, the political demand from the country will grow. We cannot continue to have a situation where people have to put themselves into bankruptcy to get the care they need. Nobody lays it out in this fashion, but that’s the practical effect of a broken long-term care system.

UPDATE: Sarah Kliff is right that the CLASS Act’s $50-a-day benefit would have been insufficient to deal with the actual costs of intensive long-term care. It comes closer on assisted living. It’s a very serious problem, however, and even the aborted solutions wouldn’t have been full solutions.

David Dayen

David Dayen