On October 14, Kathleen Sebelius, the Secretary of the U.S. Department of Health and Human Services (HHS), announced in a letter to Congressional leaders that HHS had decided that the agency would not implement the Community Living Assistance Services and Supports Act, or CLASS Act, a key portion of the Affordable Care Act.  The CLASS Act would have created a long-term care insurance plan under which voluntarily enrolled beneficiaries would pay premiums while employed, and would later become eligible to receive at least $50 per day toward health and support services in their own home.  The program was designed, in part, to enable those who were disabled to receive more affordable care outside of institutional settings.

As passed by Congress, HHS was only authorized to implement the CLASS Act if it could design a benefit plan that would keep the program actuarially sound and financially solvent for at least 75 years.  In her letter, Secretary Sebelius stated that experts throughout HHS, including the CLASS Office’s chief actuary, had evaluated numerous options for plan design, but determined that there was no “viable path forward for CLASS implementation at this time.”

HHS officials also announced that non-implementation of the CLASS Act would cut $86 billion from deficit savings originally estimated to result from the Affordable Care Act.

A copy of Secretary Sebelius’s letter is available by clicking here.