After 19 months of work examining how to structure the voluntary long-term care insurance program enacted under health reform, the Obama Administration has decided to halt its implementation. Secretary Kathleen Sebelius of the Department of Health and Human Services said in a statement that HHS could not find a way to make the Community Living Assistance Services and Supports Act (CLASS Act) financially viable over the 75 years required by the law, while still meeting the benefits requirements laid out in statute. The central problem with the CLASS Act arose from its nature as a completely voluntary and self financing program, which would be supported only through participating employees’ optional payroll deductions. HHS reported that these fiscal pressures made it impossible to fully fund the benefits required under the law.
Although HHS stated that it did not wish to repeal the CLASS Act, it did not offer solutions for reforming the program or providing alternative options for reforming the U.S. long-term care system. Secretary Sebelius said that she hoped the information gathered during the agencies’ efforts on CLASS could be used to develop other affordable and sustainable long-term care options.
The decision has provided fodder for critics of the health reform law, as the first instance in which the Administration has backed away from one of the components of its signature legislation.
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