According to Jesse Slome, executive director of the American Association for Long-Term Care Insurance the Community Living Assistance Services and Supports (CLASS) Act, was passed into law by Congress and was envisioned as a voluntary, worker-paid long term care insurance benefits program.   “The program never got off the ground because you can not offer a guaranteed issue insurance product on a voluntary basis and still make it affordable,” Slome explained.  As a result, Health and Human Services Secretary Kathleen Sebelius formally announced to Congress that she would not proceed to set up the CLASS Act program because she could see no way to guarantee that the program would be actuarially sustainable.

“Formal repeal simply puts the matter to rest,” Slome notes.  “Plus, there were several million dollars in promotional dollars that were still able to be used that have apparently now been rescinded by the new law.”

The new law signed by the President also establishes a new Congressional Long Term Care Commission that will study the issue and is required to provide a report to Congress within six months after work gets started.  “The law stipulates that at least one member of the commission should have some private insurance experience,” Slome adds.

Long term care is an enormous issue that impacts millions of America families, Slome notes.  “It is an integral part of the Medicare and Medicaid discussions that will be taking place, so it’s good that the issue is being discussed,” Slome adds.  “Hopefully they pick the best and brightest 15 people to address the issue in a fair and balanced way that will benefit the nation and its citizens as opposed to vested special interest groups.”

The formal repeal of CLASS will likely increase interest in long term care insurance according to the AALTCI director.  “I’m not sure many people were even aware that CLASS was part of Obamacare,” Slome concludes.  “But, for those who think there is a government solution around the corner, I suppose repeal is an indication that people need to take responsibility for their own personal planning.”

Established in 1998 as a non-profit trade group, the California-based American Association for Long Term Care Insurance advocates for the importance of planning for long term care and supports insurance and financial professionals who market LTC insurance. To learn more about long term care insurance costs call the organization’s offices at (818) 597-3227 or visit the Association’s website.

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The report’s conclusion:  “As currently designed, CLASS will not be able to sustain itself without subsidies from taxpayers or from all workers in the form of mandatory enrollment. ”

The conclusion continues, “In addition to being unsound, the program is unnecessary.  Americans already have an array of private long-term care insurance options to choose from; many are more economical than CLASS, most offer richer benefits.”

The report concludes that “The best remedy for the unsustainable, unaffordable CLASS program is to repeal it.”

“This is the first time I have heard a politician utter the word ‘repeal’ when referring to the CLASS Act,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance.  “I actually wish they would finalize the pricing and benefits for the CLASS plan as soon as possible becuase I believe consumers are confused.   They need to know what this will cost as soon as possible so they can make intelligent comparisons.”

If you would like a PDF of the Senate report, please contact AALTCI.

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The American Association for Long-Term Care Insurance does not lobby legislative bodies.  We are not paid by insurance companies.  Our financial support primarily comes from insurance and financial professionals who are members.  The mission of AALTCI is to inform and advocate for sound long-term care planning for all Americans and support our membership.

The passage of CLASS does not negate the need for private long-term care coverage in any way.  While we have concerns about the long-term fiscal soundness of the plan, we are optimistic that the program will play a significant role in raising consumer awareness about the many issues surrounding long-term health care and the need to plan for the risk of needing this type of costly care.

Many of the details regarding the CLASS program are not yet defined and will be developed through Government regulation.  The following is designed to address what is known currently and to answer the most common questions being asked.  We will make changes as new information becomes available.

The Association has posted current information.  Click on this link to read more about the CLASS Act.

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