Obama Administration Halts Implementation of CLASS ACT - October 18, 2011

On Oct. 14, the Obama administration announced its plan to halt implementation of the Community Living Assistance Services and Supports (CLASS) Act because of actuarial concerns that the program would not be self-sustaining, financially sound for 75 years and affordable to consumers, as mandated by the law. The CLASS Act, which was included in the Affordable Care Act (ACA), was a voluntary long-term care insurance program that would have provided a basic lifetime benefit of at least $50 a day for medical and non-medical services, including nursing home and in-home services, for elderly beneficiaries in the event of illness or disability. However, an administration actuarial analysis recently concluded that a basic CLASS insurance plan might have cost $235 to $391 a month, which was projected to be too high to encourage sufficient voluntary enrollment to allow the program to be self-sustaining. The administration’s decision does not affect the rest of the ACA.