Gang of 6 plan kills CLASS Act

The “Gang of Six” proposal for dealing with the federal deficit would eliminate the long-term care provision of the Affordable Care Act.

The Community Living Assistance Services and Supports (CLASS) Act was championed by the late Sen. Edward M. Kennedy, but criticized because it's voluntary, so only the sickest people would enroll.

Generally, the CLASS Act has receieved little notice outside the long term care industry. The program would establish a a voluntary insurance program for in-home care where individuals would pay premiums, then receive cash benefits if they become eligible for care. The specific details of the plan are not known; the secretary of Health and Human Services (HHS) has until Oct. 2012 to design the program.

The bipartisan Gang of Six's debt reduction plan calls to eliminate the CLASS Act, citing long-term problems with the program that will only grow over time. Though the Congressional Budget Office estimated that the CLASS Act would reduce federal spending by $83 billion between 2012 and 2021, eventually the program would begin to pay out more than it takes in. That's because people must pay premiums for five years before becoming eligible for benefits, so the first round of pay outs would not begin until 2017.

And because some analysists say that the program's voluntary nature would cause only the sickest to enroll, the program is not sustainable in the long term.

This is not the first time the program has been challenged — the president's bipartisan Simpson-Bowles commission on fiscal reform recommended repealing or reforming the CLASS Act last December.

HHS Secretary Kathleen Sebelius has said that the department is trying to reform the CLASS Act, and is considering multiple strategies, such as attracting healthier participants and raising premiums.

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