Author: Tom Entrikin | Posted: 21. October 2011 03:47
The U.S. Department of Health and Human Services (HHS) notified Congress on October 14 that it does not plan to implement the Community Living Assistance Services and Supports (CLASS) program under Title VIII of the Affordable Care Act (ACA). CLASS was to be financed entirely through employees’ payroll deductions on a voluntary basis (automatic enrollment with an opt-out) scheduled to begin in 2012. After a minimum 5 year vesting period, individuals who had paid CLASS enrollment premiums could qualify for cash benefits to help them purchase non-medical services and supports that they might need in the future to remain in their own homes (versus confinement in nursing homes) following the onset of functional limitations due to illness, disability, or old age. The ACA required HHS to develop at least three actuarially sound benefit plans consistent with ACA requirements governing the premiums, the vesting period, benefit triggers, and cash payments. The ACA further required that HHS certify that such a voluntary program would be financially self-sustaining, actuarially sound and financially solvent for 75 years, and affordable to consumers. HHS noted that attracting enrollees with lower health risks, people who would pay the estimated premiums over a long period of time before needing long term services and supports, would be critical from an actuarial standpoint. Most premium estimates were $127-$339/month, varying as a function of program models, benefit triggers, cash payments, and prudent assumptions as to voluntary participation percentages (only about 2.8 percent of Americans purchase long term care insurance voluntarily in the private market and the health insurance mandates and premium tax credits under other ACA provisions have no impact on CLASS). After extensive market analysis, consumer surveys, and consultations with leading actuaries, HHS informed Congress on October 14 that unfortunately it sees no financially prudent way to implement the program.
