Breaking: CLASS Program Dropped

The CLASS Program, which Health Wolters Kluwer had noted faced an uncertain future in September of this year, has been dropped. The CLASS Program was a voluntary long-term care insurance program with premiums paid through a payroll deduction from wages or self-employment income. Individuals who enrolled in the program would pay premiums for at least five years before becoming eligible to receive benefits. Today, at, HHS Secretary Kathleen Sebelius wrote:

While some analysts predicted that the CLASS program’s finances would be sustainable, others including the actuary for Medicare and Medicaid issued warnings to Congress and the public before the law was enacted that not enough young, healthy people would sign up.  This could have led to a vicious cycle where premiums would have to be set higher and higher to cover the likely costs of benefits, leading fewer and fewer healthier people to sign up for the program.  For this reason, the law required me to develop a benefit plan that, in addition to meeting other statutory requirements, would also be solvent for at least 75 years…..So even as we suspend work on implementing CLASS, we are recommitting ourselves to the ultimate goal of making sure Americans can get the long-term care they need, whether it’s a working-age mom with disabilities who needs daily support right now or a young man at his first job who wants to protect himself and his family against the possibility of huge long-term care costs in the future. 

See the full HHS report here.

Stay tuned for more to come in the next week.