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Health Policy Brief: The CLASS Act



May 18th, 2011
by Chris Fleming

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation examines the Community Living Assistance Services and Supports (CLASS) Plan, a voluntary, publicly administered insurance program enacted as part of the Affordable Care Act in 2010. It is designed to help people should they become disabled and need long-term services and supports, including home care, adult day care, or a stay in a nursing home. In exchange for paying premiums during their healthy, working years, people would get a daily cash benefit to help defray the costs of these forms of assistance.

By law, CLASS must be self-sustaining through premiums and without the infusion of federal tax dollars. As currently structured, however, the program does not appear to be financially viable. Many policy makers have called for its repeal. The Obama administration has acknowledged the program’s shortcomings and is developing modifications that it says will ensure the program will remain solvent and self-financing for at least 75 years, as the law requires.

The new policy brief examines the issues surrounding CLASS and options that policy makers may consider as they seek to make the program sustainable, such as changing the premium structure; lengthening the “vesting” period beyond the current five years; and incentivizing employers to participate by giving a one-time tax break during the program’s first year.  These and other options are likely to be reviewed in the next few months as officials prepare three plans and present them to the new CLASS Independence Advisory Council – and as Congress considers repeal bills that have been introduced in both the House and Senate.

ABOUT HEALTH POLICY BRIEFS:

Health Policy Briefs are aimed at policy makers, congressional staffers, and others who need short, jargon-free explanations of health policy basics. The briefs, which are reviewed by experts in the field, include competing arguments on policy proposals and the relevant research supporting each perspective.

Previous policy briefs have addressed:
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SIGN UP FOR HEALTH POLICY BRIEFS

Sign up for e-mail alerts about upcoming briefs. The briefs are also available from the Robert Wood Johnson Foundation’s website.

Please feel free to forward the briefs to any of your colleagues who are tracking health issues. And after you’ve taken a look, we welcome your feedback at: hpbrief@healthaffairs.org.

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1 Trackback for “Health Policy Brief: The CLASS Act”

  1. On The Record | The Incidental Economist
    May 19th, 2011 at 5:46 am

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