CLASS Dismissed

Monday, October 17th, 2011 | Health Insurance | Comments Off

By Julie Appleby and Mary Agnes Carey

KHN Staff Writers

Federal officials on Friday effectively shut down part of the health care law that would have helped consumers cover some long-term-care costs, saying they could not find a way to make it work financially.

After looking at a variety of options, the Obama administration determined the CLASS Act program could not simultaneously meet three important criteria: be self-sustaining, financially sound for 75 years and affordable to consumers.

The move does not affect the rest of the health care law, although it does remove more than $70 billion in expected federal budgetary savings over 10 years.  The savings would have come having policyholders pay premiums for the first few years, but not receive benefits until 2017.

The program – championed by the late Sen. Edward Kennedy – would have allowed working adults to apply for insurance that would provide up to $50 a day in cash benefits if they became disabled. The money could be used to help with in-home assistance or nursing home care.

Read the rest of the article here.