U.S. House Passes Bill to Kill the CLASS Act

February 02, 2012

The U.S. House of Representatives has passed legislation that effectively kills the Community Living Assistance Services and Supports program, or CLASS Act, whose implementation has been suspended since October.

The House passed the legislation in a 267-159 vote Jan. 2. The CLASS Act, which was created under the Patient Protection and Affordable Care Act, was designed to set up a voluntary long-term care program. The program has drawn fire from critics and supporters of PPACA who have said the CLASS Act was unworkable as written.

Health and Human Services Secretary Kathleen Sebelius moved in October to suspend the program, saying at the time that because the program was voluntary, it was "unworkable." Sebelius has said the voluntary nature would have created adverse selection.

Under the PPACA, the CLASS Act, would have required participants to pay a monthly premium for five years. Once that threshold was met, participants would become eligible for more than $50 a day to help offset long-term care services.

Those benefits, while a fraction of the estimated $75,000/year cost of nursing home residency, would have helped families cope with the costs of care, particularly services provided in the home. However, HHS couldn't justify moving forward with it, given the law's requirement it be proved solvent over a 75-year period. Sebelius suspended the program and reassigned the staff tasked with setting up the program before a single dollar could be collected from potential beneficiaries (Best's News Service, Oct. 14, 2011).

Earlier this month, the U.S. House Ways and Means Committee passed legislation that would do away with the program entirely, and the full House followed suit (Best's News Service, Jan. 19, 2012).

The bill will now be sent to the Democrat-controlled Senate, where it is expected to face an uphill battle.

Robert Rusbuldt, president and chief executive officer of Independent Insurance Agents & Brokers of America, praised House lawmakers for passing the bill, saying in a statement the program was "doomed from the start and should be taken off the books now that the Obama administration has also deemed it unworkable."

(By Jeff Jeffrey, Washington Correspondent: jeff.jeffrey@ambest.com)