Lawmakers Struggle To Offer Alternatives to CLASS Act Program

It is unclear how the federal government will approach the issue of long-term care now that the Obama administration has suspended the Community Living Assistance Services and Supports Act created by the federal health reform law, Politico reports (Norman, Politico, 10/24).

Background

The CLASS Act was intended to provide insurance to workers if they become unable to care for themselves because of injury or illness. Since its inception, critics questioned the CLASS Act's fiscal sustainability and called it an "accounting gimmick."

In a letter sent earlier this month, HHS Secretary Kathleen Sebelius informed congressional leaders that the administration suspended the program indefinitely. She wrote there was not a "viable path forward" to implement CLASS while keeping it affordable and financially solvent. However, a White House spokesperson said the administration does not want to completely repeal the program (California Healthline, 10/18).

Regardless, critics of the CLASS Act are seeking a repeal. However, a viable alternative for the initiative remains elusive.

David Certner, legislative policy director for AARP, said, "CLASS was the one big idea out there, and I don't think there's another one waiting in the wings." He said the lack of alternatives is unfortunate because "the unmet need" for long-term care "is huge."

Need for Long-Term Care

According to Politico, about 20 million U.S. residents likely will need long-term care at some point in the next few years, but only seven million have private insurance that will cover the cost (Politico, 10/24).

Polling data show that many U.S. residents assume that Medicare pays for all long-term care services. However, the program stops paying nursing home bills after 100 days (Harris/Pear, New York Times, 10/24).

Currently, Medicaid pays for about half of long-term care costs, the majority of which are in-patient nursing home services. However, patients must meet low-income requirements to qualify for the coverage. Further, impending cuts from the debt panel could affect long-term care coverage under Medicaid.

Other Long-Term Care Proposals

Republicans have suggested that in place of a government program, lawmakers should create more incentives for individuals to purchase private long-term care coverage.

Sen. John Thune (R-S.D.), chair of the Senate Republican Policy Committee, previously proposed tax incentives to encourage individuals to purchase such coverage. An aide said lawmakers might consider the idea again now that CLASS is suspended.

However, persuading people to buy long-term coverage could be a significant challenge, as many individuals do not think about or plan for being incapacitated for long periods, Politico reports. As a result, many U.S. residents avoid long-term care coverage until they are older and premiums have become prohibitively expensive.

John Rother, president of the National Coalition on Health Care, said the best strategy is to keep CLASS in waiting for a few years until the reform law is fully implemented and the political climate has changed to allow modifications to the program. He said, "There are ways to fix this, but those ways right now look politically impossible," adding, "Getting Congress to agree on anything related to [the reform law] is just not practical" (Politico, 10/24).

Robert Yee, a financial actuary hired by the Obama administration to work on CLASS, said a successful long-term care program must incorporate approaches favored by both parties (Alonzo-Zaldivar, AP/San Francisco Chronicle, 10/24).