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Life Health > Long-Term Care Planning

CLASS: Can It Survive?

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Critics of the new Community Living Assistance Services and Supports (CLASS) program say the voluntary worksite long term care plan is doomed; supporters say the government has the flexibility to make it work.

The health subcommittee at the House Energy and Commerce organized the CLASS hearing to review the arguments about the likely fate of the program, which was created by Section 8002 of the Patient Protection and Affordable Care Act (PPACA).

The program is supposed to be a voluntary, premium-supported long term care (LTC) U.S. Capitolbenefits program that will provide $50 in cash benefits per day, indexed for inflation, in exchange for a relatively low premium.

Critics say congressional efforts to keep the premiums low and make the program voluntary could lead to a death spiral, with a dwindling, increasingly sickly group of workers buy coverage as the programs managers impose rate increase after rate increase to cope with underwriting losses.

Kathy Greenlee, assistant secretary for aging at the U.S. Department of Health and Human Services (HHS), said the United States must make the CLASS program work.

Individuals are relying on Medicaid nursing home benefits because they have little understanding of the need to prepare for long term care expenses, Greenlee said.

Medicaid nursing home care costs “are a key source of financial stress on public budgets,” Greenlee said.

Medicaid programs spent about $111 billion on LTC services in 2009 alone, Greenlee said.

“Spending growth on these services is projected to accelerate as the population

ages, stressing both federal and state budgets,” Greenlee said.

The HHS secretary has the responsibility and the flexibility to ensure that the program is fiscally sound, and she can increase its stability through many strategies, Greenlee said.

Greenlee said strategies that could increase the stability of the program could include:

Joining with employers to promote the program and enroll a higher percentage of employees.

Making sure the employment and earnings requirements for applicants are strict enough that the applicants really are at work, not already sick enough to expect to file claims soon.

- Discouraging workers from bouncing in and out of the program and participating only when they feel like paying the premiums.

- Indexing premiums for inflation.

William L. Minnix Jr., president of LeadingAge, Washington, a group that represents organizations with an interest in aging, said he thinks the CLASS program will be sound because many officials — including a board of trustees, the HHS secretary and the Treasury secretary — will help oversee the program and make sure adjustments are made when needed.

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