3.2: CLASS Act
REFORM OR REPEAL THE CLASS ACT. Other Information:
(Costs $11 billion in 2015, $76 billion through 2020) The Community Living Assistance Services and Supports (CLASS) Act established
a voluntary long-term care insurance program enacted as part of the Affordable Care Act (ACA). The program attempts to address
an important public policy concern – the need for non-institutional long-term care – but it is viewed by many experts as financially
unsound. The program’s earliest beneficiaries will pay modest premiums for only a few years and receive benefits many times
larger, so that sustaining the system over time will require increasing premiums and reducing benefits to the point that the
program is neither appealing to potential customers nor able to accomplish its stated function. Absent reform, the program
is therefore likely to require large general revenue transfers or else collapse under its own weight, Commission advises the
CLASS Act be reformed in a way that makes it credibly sustainable over the long term. To the extent this is not possible,
we advise it be repealed. Technically, repealing the CLASS Act will increase the deficit over the next decade, because the
program’s premiums are collected up front and its benefits are not paid out for five years. To address this, we would replace
the deficit reduction on paper from the CLASS Act with real options that truly save the federal government money and put it
on a more sustainable path.
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