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Will CLASSes be different next semester?

Much of the recent media coverage concerning health care has focused on its importance in the 2012 elections, most importantly the Presidential race. While the legality of mandatory health insurance, the difficulty surrounding the establishment of health insurance exchanges and the implementation of Accountable Care Organizations (ACO) to reduce Medicare costs are often featured prominently in the press, many other provisions that were once highly touted are absent.

One such component of the Affordable Care Act is the Community Living Assistance Services and Supports (CLASS) plan. The idea behind CLASS was to offer individuals a voluntary publicly administered program designed to accept premium payments during working years that would be paid in the form of a cash benefit to defray the cost of long term care services: home care, nursing home care or adult day care. The CLASS plan would be available to anyone earning at least $1200 annually. There is no health screening prerequisite for participation. In order to be eligible to receive benefits, the plan requires an individual to pay premiums for five years, yet only work for three of them.

Many of the CLASS regulations have yet to be released and must issued by October 2012. While that is more than a year away, if the CLASS plan is to operate the way it was intended, it would seem that the curriculum needs to be updated. With a very short time period required to accumulate benefits and no age or preexisting condition limitation, considerable adverse selection is likely. Younger people would have little incentive to participate, and CLASS isn’t mandatory. The premium payments have not been specified so that it is difficult to determine what would incent participation.

How the CLASS plan affects traditional long term care programs remains to be seen. Private long term solutions may have better coverage and could certainly appeal to more affluent individuals. The idea of enrolling in CLASS and supplementing coverage with private long term care might also be a possibility.

It may well be a while before CLASS is highlighted, in its current form or amended. Planning for long term care, however remains critical. For additional information, contact Ellen at EAB HealthWorks.