The Community Living Assistance Services and Supports (CLASS) program, the long-term care program proposed in the PPACA, was intended to pay for itself entirely with premiums paid by beneficiaries. The program's critics, in Congress and elsewhere, had claimed that this was impossible. Now, in a letter to House Speaker John A. Boehner (R-Ohio) on October 14, Kathleen Sebelius, Secretary of the U.S. Department of Health and Human Services (HHS), conceded, "I do not see a viable path forward for CLASS implementation at this time."
Originally scheduled to begin in October 2012, the CLASS program was to be voluntary and available to most working adults. According to estimates, about 15 million Americans will need some kind of long-term care by 2020, and fewer than three percent have a long-term care policy. The CLASS program would not have disqualified any enrollee based on a pre-existing medical condition and would have paid to eligible beneficiaries, after five years of premium payments, a stipend of at least $50 a day for health and support services at home or in institutions.
Recently, critics of the CLASS program had expressed concern that a funding shortfall was inevitable and would eventually require a federal government bailout. As far back as 2009, during the consideration of the PPACA, the actuary at CMS had questioned the program's viability in a report to Congress. In her letter, HHS Secretary Sebelius said that in a "methodical and comprehensive" 19-month analysis of the actuarial and financial elements of the CLASS program, HHS experts had reached the same conclusion "despite [their] best analytical efforts." The full HHS report, as sent to Congress, is available at http://aspe.hhs.gov/daltcp/reports/2011/class/index.shtml.
In her letter, Secretary Sebelius said that the PPACA required that CLASS “be actuarially sound and financially solvent for at least 75 years." In its report, HHS was unable to construct a benefit plan that would meet these criteria. Nonetheless, according to Secretary Sebelius, the report "reflects the development of information that will ultimately advance the cause of finding affordable and sustainable long-term care options.”