Kirsten J. Colello Specialist in Health and Aging Policy
Janemarie Mulvey Specialist in Health Care Financing
Under current law, the majority of paid long-term services and
supports (LTSS) are funded by public programs, such as Medicaid and
Medicare. However, these programs are limited in scope and continue to
face increased financial pressures. Although private long-term care (LTC) insurance
is available to provide some financial protection against an individual’s risk
of the potentially high cost of LTSS, fewer than 10% of individuals aged
50 and older own such a policy. Thus, for the majority of older Americans,
the out-of-pocket cost of obtaining paid help for these services may far
exceed their financial resources. The Patient Protection and Affordable Care
Act (ACA; P.L. 111-148, as amended) initially established a federally
administered voluntary LTC insurance program entitled the Community Living
Assistance Services and Supports (CLASS) program. The stated purpose of
the CLASS program, among other things, was to provide a financing
mechanism for long-term care services that supports personal choice and independence
to live in the community. However, a number of concerns were raised about the long-run
sustainability of the program and as a result on October 14, 2011, the
Department of Health and Human Services (HHS) sent a letter to Congress
stating that after careful examination of how the Administration might
implement a long-term financially stable CLASS program, HHS did not see a
viable path forward for implementation at that time.
With administrative implementation of the CLASS program stalled, the 112th Congress took legislative action to repeal the CLASS program
provisions under the ACA. On January 3, 2013, President Obama signed the
American Taxpayer Relief Act of 2012 (ATRA, P.L. 112-240). Among its
provisions, Sec. 642 of ATRA repealed Title XXXII of the Public Health Services
Act entitled “Community Living Assistance Services and Supports” (CLASS).
In doing so, it also made certain conforming statutory changes to the ACA
by repealing Title VIII related to the CLASS program and certain
provisions in Medicaid statute (Title XIX of the Social Security Act).
Sec. 642 also rescinded the unobligated balance of ACA’s funds to the National Clearinghouse
for Long Term Care Information (ACA had provided $3 million in mandatory funding
for each of fiscal years 2011 through 2015 for this activity).
Despite the repeal of the CLASS program provisions, and with it the establishment
of a voluntary federally administered long-term care insurance program,
the issue of comprehensive long-term services and supports (LTSS) reform
will likely be of consideration in the 113th Congress.
Within 30 days of enactment, Sec. 643 of ATRA established a Commission on
Long-Term Care (LTC). The new LTC Commission, composed of 15 members
representing the interests of certain LTSS stakeholders and organizations,
will be appointed by the President and other specified congressional
leaders. The commission is required to develop a plan and legislative recommendations
for the establishment, implementation, and financing of a LTSS system.
This report first discusses the cost and financing for LTSS and the current
market for private LTC insurance. It then details the various CLASS
program requirements, which, although now repealed, may remain of interest
to Congress and are relevant to ongoing discussions of LTC proposals.
Finally, it provides a discussion of the long-run sustainability concerns and
the status of administrative implementation.
Date of Report: February 13, 2013
Number of Pages: 21 Order Number: R40842 Price: $29.95
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