As Americans continue to grapple with the provisions of the new health care act, one new law, the Community Living Assistance Services and Supports Act (or CLASS Act), has received less media coverage than other aspects of reform. The CLASS Act provides for federal long term care insurance, which offers assistance with the tasks of daily living to the chronically ill or disabled.
Beginning in 2011, employees will be automatically enrolled in CLASS Act LTCI if their employers choose to participate. Monthly premiums will be deducted from employees’ paychecks unless they opt out of the program. Cash benefits, designed to help cover the cost of in-home care or institutional day care, would become available if the beneficiary became disabled. Beneficiaries would be required to pay premiums for five years and have worked for three of those five years before being eligible for benefits. Traditional LTCI, by comparison, has no such qualifying period.
Legislators pushed the act through by claiming that the federal LTCI program would cut the federal deficit by $72.5 billion. However, that figure is misleading because it reflects only the inception period of the program, when employees will be paying premiums but will not be permitted to collect benefits. This fact was acknowledged by the Congressional Budget Office, which predicted that “in the decade following 2029, the CLASS program would begin to increase budget deficits … by amounts on the order of tens of billions of dollars for each 10-year period.”