Flying Beneath the Radar of Health Reform: The Community Living Assistance Services and Supports (CLASS) Act

Abstract

The Patient Protection and Affordable Care Act attempts to address prevailing deficiencies in long-term care (LTC) financing through the Community Living Assistance Services and Supports (CLASS) Act, a national voluntary LTC insurance program administered by the Federal government. The CLASS Act is intended to supplement rather than supplant assistance received from other payers. Furthermore, its reliance on a cash benefit allocated by beneficiaries with the assistance of counseling services makes it consistent with the consumer-directed philosophy increasingly favored by the LTC advocacy community. Largely due to inadequate take-up, however, particularly among better than average risks, it is unlikely that implementation of the CLASS Act will fundamentally alter the current public-private partnership for LTC financing. Instead, voluntary enrollment combined with a lack of medical underwriting could lead to disproportionate numbers of high-cost enrollees. This could result in premium increases that further discourage participation on the part of the broader population. Barring making the program mandatory, there are a number of comparatively minor changes policymakers could make to strengthen the risk pool, though doing so will involve a trade-off between attracting better-off risks while eschewing those likely to need the benefit most. Thus, although the CLASS Act may provide a meaningful benefit for those who enroll, its impact on improving the affordability of LTC for most Americans will likely be limited. Most will continue to rely on substantial unpaid care, out-of-pocket payments when formal care is required, and Medicaid when all other money has run out.