CLASS Program Faces Uncertain Future

Recent published reports have noted that the Department of Health and Human Services has reassigned most of the employees charged with implementing the Community Living Assistance Services and Supports (CLASS) program, a key part of the health care reform law enacted in 2010.

CLASS is a is a voluntary long-term care insurance program with premiums paid through a payroll deduction from wages or self-employment income. Individuals who enroll in the program would pay premiums for at least five years before becoming eligible to receive benefits.

A January 2011 report from the Congressional Research Service noted that the CLASS program would reduce the federal budget deficit between $38 billion to $70 billion over 10 years, depending on how many people enrolled in the program. A September 22 2011, story from the the Associated Press noted that an actuary responsible for making long-term projections on the program was leaving HHS, and that eight people on the CLASS program staff had been reassigned.

In August of 2011, the Congressional Budget Office released a report that noted that the program was at least a year behind schedule, with premiums expected to be collected starting in 2013, not 2012 as outlined in the  legislation. On September 21 2011, the Senate Appropriations Committee passed a bill that removed all funding for implementing the CLASS Act; the Obama administration had requested $120 million in its fiscal year 2012 budget plan released earlier this year.

On September 22 2011, congressional Republicans sent a letter to HHS Secretary Kathleen Sebelius with a list of 24 questions about implementation of the program, including how many employees were currently actively involved in implementing the program, whether HHS expected to continue implementation of the program, and what legal authority HHS had to change statutory provisions of the program relating to eligibility, premiums, and benefits.

One of the major concerns since the CLASS program was enacted was that as designed it would not be self-supporting just based on premiums paid in by enrollees, and that it would require significant extra federal budgetary support in the future to maintain the program’s benefits.