September 22, 2011

Health Care Law’s LTC Plan Appears Endangered by CLASS Act’s Potential Demise

HHS denies LTC program is being abandoned even as office staff slashed

A report that the office administering the CLASS Act, the long-term care insurance component of the health care reform law, was to be shut down on Friday was making the rounds on Thursday, but the Department of Health and Human Services denied it in a statement issued later in the day.

A Wall Street Journal report cited Bob Yee, chief actuary for the HHS office that administers the program, as saying that he had been let go and the office was to shut its doors on Friday. He was quoted saying, “My understanding is they’re slowing down the development [of the program]. They’re taking a pause and reducing the amount of work being done.”

Yee was hired in January to develop actuarially sound figures for CLASS Act premiums and payouts. He said he had done so, and submitted the information. He also said he did not know how officials were explaining the staff reductions, but said in the report, “Clearly, all the people are reassigned, I’m leaving, so there’s nobody else except maybe the head of the office.”

HHS issued a statement that denied the office was to shut down officially. It did confirm that the program might not proceed, however. The statement said, “While the staff of the CLASS office has been reduced, reports that the CLASS office is closing are not accurate. We are continuing our analysis of this program. As we have said in the past, it is an open question whether the program will be implemented. A CLASS program will only be implemented if it is fiscally solvent, self-sustaining, and consistent with the statute.”

Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI), said of the HHS action in an interview, “Clearly, we are living in political times when rhetoric outweighs intelligence. And, really, the global recession is the root cause for the inevitable failure of CLASS. So it’s a logical and intelligent move for HHS to move the program further into obscurity without calling for outright cancellation.” Slome pointed out that the problem of how to deal with Americans’ LTC needs wasn’t going away.

He added, “I give [HHS] Secretary [Kathleen] Sibelius high marks for two things: first, if CLASS did not seem viable, they [HHS] weren’t going to force it upon the nation, and second, for handling it in a way that really just doesn’t give those who only want to attack more ammunition. That said, it does nothing to solve the nation’s problem of the millions of aging Americans who will need long-term care.”

Reprints Discuss this story
This is where the comments go.