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Implementation of CLASS shut down

October 14, 2011
by root
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Government officials Friday announced that implementation of the voluntary LTC insurance program within healthcare reform, known as the Community Living Assistance Services and Supports (CLASS) Act, has been shut down due to “critical design flaws that could not be fixed to make it financially self-sustaining,” the Associated Press reported.

Health and Human Services Secretary Kathleen Sebelius, who had previously said that the CLASS program would not be rolled out until the Obama administration could ensure its sustainability for 75 years, sent a letter to Congress with today’s decision to discontinue its implementation.

“[O]ur department has worked steadily to find a financially sustainable model for CLASS,” Sebelius wrote in a Friday op-ed column for the Huffington Post. “Over the last 19 months, we've examined the long-term care market, modeled possible plan designs, and studied the CLASS statute, consulting at every step of the way with outside actuaries, insurers, and consumer groups.”

“But as a report our department is releasing today shows,” Sebelius continued, “we have not identified a way to make CLASS work at this time.”

Sebelius said that while CLASS is not going to be implemented, “it doesn't mean that we're giving up our efforts to improve Americans' long-term care choices,” although the column was vague in what those efforts will be.

Concerns over CLASS’ future reached a fever pitch last month when it was reported that the entire staff devoted to the program had been reassigned, shelving CLASS for an undisclosed amount of time.

Connie Garner, executive director of Advance CLASS, Inc. along with Larry Minnix, CEO of LeadingAge released the following statement on the HHS CLASS announcement:

"The President of the United States promised to implement this program, and until we hear something different directly from the White House, we will expect him to keep that promise.

"The actuarial report established that CLASS can be implemented sustainably. The specific steps it recommends may not be perfect, but provide plenty of ideas for continued development and eventual implementation of a sustainable program.

"CLASS is a critical backstop, giving working families a tool to protect themselves from being one illness or injury away from poverty. Without it, there will only be greater strain on other healthcare programs, particularly Medicaid."