[NYAPRS Enews] FN: CLASS Act Vulnerable in Budget Negotiations

[Harvey Rosenthal]

'Gang of Six' Budget Plan Would Eliminate Obama's Long-Term Care Savings
Program

By Stephen Clark  Fox News  July 20, 2011 

 

A key provision in President Obama's health care law that would allow
Americans to save money for elderly long-term care has been put on the
chopping block as part of a sweeping $3.7 trillion deficit-reduction
plan proposed by a bipartisan group of senators known as the "Gang of
Six."

The provision is known as the CLASS Act, or the Community Living
Assistance Services and Support Act, and was designed to relieve
pressure on Medicaid and help keep Americans out of nursing homes by
enabling them to save for future senior assistance with issues like
eating, bathing or dressing as they get older.

But the program has yet to begin amid concerns about the actual
long-term costs.

Critics, citing the Congressional Budget Office, have argued the CLASS
Act is little more than a short-term revenue fix that will eventually
add to the federal deficit. They also say that a mandate would be
required to sustain the program because premiums would ultimately be
based on how many Americans actually sign up.

President Obama's own deficit reduction commission last year recommended
reforming or abandoning the program, saying in its report that "absent
reform, the program is therefore likely to require large general revenue
transfers or else collapse under its own weight."

As written, the CLASS Act would allow workers to have an average of
about $150 or $240 a month automatically deducted from their paycheck to
save for costs associated with long-term care, such as nursing home fees
that aren't covered by Medicare or Medicaid.

The deduction, which was scheduled to begin next year, is tied to a
sliding scale based on age. Younger workers would be charged less while
older workers charged more.

After a five-year vesting period, enrollees who need help bathing,
eating or dressing will be eligible to take out benefits, estimated to
be around $75 a day for in-home care.

Even though the health care law stated that the program is designed to
be self-sustaining, with an advisory board to ensure the funds remain
solvent, Health and Human Services Secretary Kathleen Sebelius
acknowledged during a congressional testimony in February that the
program as originally envisioned is "totally unsustainable."

"We determined pretty quickly it would not meet the requirement that the
act be self-sustaining and not rely on taxpayer investments," she told a
Senate panel.

"If you would take a snapshot of what was written as the criteria of how
many years someone would have to work, what the wage would have to be to
enter the program, if there would be any indexing in benefits, the
snapshot in the bill I would absolutely agree is totally unsustainable,"
Sebelius said, noting that her department was working on making a number
of changes to the program.

But with the Gang of Six plan gaining steam in Congress, that may not be
necessary. Though it is unlikely to get passed before an Aug. 2 deadline
that the Obama administration says is the date when the U.S. risks a
first-ever default, future passage could bring an end to the CLASS Act
before it ever began.

It remains to be seen whether Sebeilus supports the proposed elimination
of the program. Her office declined to comment for this story.

But supporters say eliminating the CLASS Act would be "shameful."

"CLASS will save money for individuals, families, states and the federal
government over time," Larry Minnix, president and CEO of LeadingAge, an
elderly advocacy organization, said in a statement. "More important, it
will help people remain independent at home while not draining
government resources."


http://www.foxnews.com/politics/2011/07/20/gang-6-budget-plan-would-elim
inate-obamas-long-term-care-savings-program/#ixzz1Sq5Fuh5W

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