The Community Living Assistance Services and Supports Act (or CLASS Act) was a U.S. federal law, enacted as Title VIII of the Patient Protection and Affordable Care Act. The CLASS Act would have created a voluntary and public long-term care insurance option for employees, but in October 2011 the Obama administration announced it was unworkable and would be dropped. The CLASS Act was repealed January 1, 2013.
Under the Act the Department of Health and Human Services was to set the terms prior to implementation, but determined the program was not viable and could not go into effect.
The CLASS Act had been "a key priority" of the late Senator Edward "Ted" Kennedy.
Key provisions
Most of the terms were to be developed by the Department of Health and Human Services over several years. However, certain terms were set in statute:
Enrollees would have paid a monthly premium, through payroll deduction
Enrollees would have been covered on a guaranteed-issue basis
Enrollees would have been eligible for benefits after paying premiums for five years and having worked at least three of those years Enrollees would have received a lifetime cash benefit after meeting benefit eligibility criteria, based on the degree of impairment
Timeline for provisions
June 21, 2010: Required the Secretary to establish a Personal Care Attendants Workforce Academy Advisory Panel for the purpose of examining and advising the Secretary and Congress on workforce issues related to personal care attendants By January 1, 2011: Established the CLASS Program, as specified By January 1, 2011: Addressed infrastructure for personal care attendant workers By January 1, 2011: Required information on supplemental coverage from the CLASS program in the National Clearinghouse for Long-Term Care Information By January 1, 2012: Would have required the Secretary to (1) establish an Eligibility Assessment System (2) enter into agreements with the Protection and Advocacy System for each state; and (3) enter into agreements with public and private entities to provide advice and assistance counseling. By October 1, 2012: Would have required the Secretary to designate a benefit plan as the CLASS Independence Benefit Plan and publish such designation, along with details of the plan and the reasons for the Secretary's selection, in a final rule to allow for a public comment period. Beginning January 1, 2014: Would have required the Secretary to submit an annual report to Congress on the CLASS program, as specified.
Goals of the legislation
Expanded availability of long-term care
According to Barbara Manard, a health economist with LeadingAge, the act would have created "a national insurance trust" with a potential "daily cash benefit on the order of about $50 to $75 a day, depending on your level of disability."
Reduce near-term government deficit
The Congressional Budget Office estimated the program would have resulted in $72 Billion in deficit reduction in the first ten years, including $2 Billion in Medicaid savings because of individuals receiving benefits under the CLASS Act that they could have received under Medicaid, and because no benefits would be paid out at all in the first five years. However, in the longer term, the CBO noted that "In the decade following 2029, the CLASS program would begin to increase budget deficits" as payouts increased, with the trust fund remaining solvent for a seventy-five year period but running bankrupt after that. The effect on the deficit in the ten-year budget window was particularly important due to the Byrd Rule.
Premiums
Premium rates were to be determined by the Department of Health and Human Services with subsidies for low-income individuals and students. Premium rates would have varied by issue age. The CLASS program contained an implicit redistribution tax to subsidize lower income and full-time student participants.
Benefits
The legislation did not set specific benefits. The Secretary of Health and Human Services was tasked with developing actuarially sound premiums and benefits.
Many organizations, including the Congressional Budget Office, developed estimates of potential premiums and benefits:
Benefits would have varied by severity of functional limitation, with the average being at least $50 per day. The benefit schedule could have been adjusted in future years by the Secretary.
Enrollment process
Employers would have auto-enrolled employees through payroll deduction, a negative election similar to some 401(k) plans.