ObamaCare Long-Term Care Withholdings

One of the little-discussed provisions of ObamaCare is that beginning in 2012 money will be automatically withheld from your paycheck for long-term care.  The amount has not been decided, but numbers from $146 per month to $240 per month are being discussed.  It will be possible to opt out of this plan, but we do not yet know how difficult or easy that may prove to be.

I am a bit puzzled at the numbers being discussed here.  Then again maybe I am not.  My wife and I started paying for long-term care insurance just a few years ago and the amount we pay was a function of how late in life we began paying for it.  The average worker is surely much younger than we were when we started paying for this insurance, so one would think they would pay less than we are paying.  But, what we are paying is about equal to the $146 per month figure.  So why would the government withholding be so high?

I suspect the answer lies in the supply and demand expected.  First, many Baby Boomers will eventually need long-term care and when that wave hits the limited supply of long-term care providers, costs will go way up.  Second, this program of automatic withholdings will likely also increase future demand greatly for long-term care.  So, the government must plan for major future cost increases for long-term care.  But, nobody can reasonably pretend to predict now what that care will cost given the new uncertainties introduced by ObamaCare.  I expect our insurance will become quite the bargain given how much ObamaCare will increase the costs.  Of course, that may bankrupt our private insurance company and be a disaster for us.

Will the people who are put on the ObamaCare long-term insurance plan be doing so in the same way that people are put on Medicare and Social Security?  That is, is this a plan in which they have no right to expect benefits and those benefits may be taken away at the whim of Congress?  Is this another Ponzi scheme?  Or will the government actually invest their money for their future use?  Given that this is a Democrat plan, I expect they will use the money for current expenditures on the general budget and write IOUs to be redeemed later when the government has no expectation of being able to honor them or can attempt to do so only in the midst of huge deficits due to Medicare, Medicaid, and Social Security.  Good luck with that "investment" scheme.

Postscript Summarizing the Comments below of Scott A. Olson, a professional long-term care insurance seller with 15 years experience and licensed to sell long-term care insurance in 37 states:

The CLASS Act long-term care insurance will allow people with any health history to have long-term care insurance.  It will cost people below the poverty level income only $5 per month.  The plan is operated with a "trust fund" similar to that of the Social Security program.