The Obama administration scrapped the CLASS Act long term care insurance program because it was too expensive and not financially sustainable.
The CLASS Act LTC plan was a good idea and would have guaranteed issuance of a long term care policy even to those with poor health, but the premiums collected would not have been enough to cover long term care claims. One Senator went as far as calling the long term care program a Ponzi scheme because the only way to pay for claims on old policies would be to collect premiums on new policies. This would have created a vicious cycle of ever-increasing premiums which would eventually dissuade healthy individuals for signing up for the program.
READ MORE: Learn how the costly CLASS Act long term care insurance plan was scrapped by the Obama administration.
