CLASS Act Long-Term Care Program Facing Repeal

October 19, 2011

The Community Living Assistance Services and Supports (CLASS) Act was enacted as part of the Patient Protection and Affordable Care Act (PPACA) in 2010.  The CLASS Act would create a voluntary program that would provide long-term care for seniors in exchange for premiums paid by beneficiaries.  The law requires that it be actuarially sound for 75 years.

In a letter to Congress on October 14, 2011, HHS Secretary Kathleen Sebelius indicated that the Department could see no actuarially sound way forward.  The Department will not, therefore, implement the CLASS Act long-term care program.

Soon thereafter, CBO Director Douglas Elmendorf issued a letter stating that “Beginning immediately, therefore, legislation to repeal the CLASS provisions in current law would be estimated as having no budgetary impact.” This is important to repeal efforts because the CLASS Act would have collected revenues for five years before any benefits were paid out. Thus, it was initially scored by CBO as reducing the deficit and proposals to repeal it were scored as increasing the deficit.

The White House has introduced some ambiguity to the issue of whether the Act will be repealed.  Nick Papas, spokesman for the White House Office of Health Reform has sent an email to CLASS Act supporter stating, “We do not support repeal. Repealing the CLASS Act isn’t necessary or productive.”