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CLASS dismissed, voluntary program not sustainable

Mon Oct 17th, 2011 on     Long-Term Disability,    

The U.S. Department of Health and Human Services has been over the numbers time and again, but it just won’t work. Last week, HHS Secretary Kathleen Sebelius told Congress that the Community Living Assistance Services and Supports program can never be actuarially sound. The insurance program was to have been established under the Affordable Care Act.

Floridians looking for affordable long-term care insurance will not be able to look to the government for coverage any time soon. CLASS was the Obama administration’s response to a growing need for affordable long-term care insurance.

Although enrollment in CLASS would have been voluntary, the program did not escape harsh criticism from either Republicans or the private sector. The question has always been the sustainability of CLASS. Under the ACA, the program must be financially solvent for a minimum of 75 years. (And, of course, it must be actuarially sound.)

In September, a Republican working group reported that the Obama administration had doubted the feasibility of the program even before it was rolled into the ACA. Earlier last month, the chief actuary assigned to CLASS resigned, and most CLASS staff members were assigned to different departments or projects.

Partisan politics aside, many critics said the program was simply too ambitious. The administration and the Congressional Budget Office had projected that CLASS would save $70 billion over 10 years — dollars that would have offset implementation costs for the ACA. With CLASS money gone, the ACA projections will have to be revised.

A representative from the Association for Long-Term Care Insurance praised the effort, though. The program gets points for trying, he said, adding, “Private long-term care insurance is not the universal answer for all.”

Source:, “Obama’s Delinquent CLASS Suspended,” Sean P. Carr, Oct. 14, 2011

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