WHY CLASS was dis­missed

Pro­gram at a stale­mate, but some see po­ten­tial

Modern Healthcare - - FRONT PAGE - Jes­sica Zig­mond

HHS won’t im­ple­ment it, con­gres­sional Repub­li­cans want to kill it, and the White House says re­peal­ing it isn’t nec­es­sary or pro­duc­tive. But ex­perts con­tend that when it comes to the CLASS Act, “it” still needs to be de­fined.

In­cluded in last year’s health­care re­form law, the Com­mu­nity Liv­ing As­sis­tance Ser­vices and Sup­ports Act was en­vi­sioned as a vol­un­tary, af­ford­able, long-term-care in­sur­ance pro­gram. HHS was re­spon­si­ble for de­vel­op­ing a ben­e­fit plan that was fi­nan­cially sus­tain­able for 75 years and met the le­gal re­quire­ments out­lined in the Pa­tient Pro­tec­tion and Af­ford­able Care Act.

HHS Sec­re­tary Kath­leen Se­be­lius said her depart­ment spent the past 19 months ex­am­in­ing the long-term-care mar­ket, mod­el­ing the pos­si­ble de­signs and study­ing the law. “We have not iden­ti­fied a way to make CLASS work at this time,” she wrote in an Oct. 14 blog post.

But oth­ers say that con­clu­sion is pre­ma­ture. “We handed the ad­min­is­tra­tion an in­fra­struc­ture. That was it,” said Con­nie Gar­ner, former pol­icy di­rec­tor for dis­abil­ity and spe­cial pop­u­la­tions at the Se­nate Health Ed­u­ca­tion La­bor and Pen­sions Com­mit­tee un­der the late Sen. Ted Kennedy (D-Mass.), a cham­pion of the pro­gram. Gar­ner now serves as the ex­ec­u­tive di­rec­tor of Ad­vance CLASS, an ad­vo­cacy group.

When the pres­i­dent signed the bill into law, the ad­min­is­tra­tion had a frame­work to be­gin work­ing on the is­sue of long-term care, Gar­ner said. She likened the en­deavor to solv­ing a Ru­bik’s cube. In other words, keep at it un­til it works.

Gar­ner said the con­cept and de­sign of CLASS is un­fa­mil­iar to those in govern­ment, with no di­rectly com­pa­ra­ble data to show po­ten­tial for suc­cess. The data avail­able, she said, is from the long-term-care in­dus­try. Pri­vate ben­e­fits have a 2% par­tic­i­pa­tion rate, Gar­ner said, so the out­look for CLASS is bleak based on those numbers. “Ev­ery ac­tu­ary in the coun­try that we’ve worked with has said the same thing,” she said. “On this pro­gram, you’re not go­ing to know un­til you know.”

Mean­while, HHS was pre­sented with some vi­able op­tions, ac­cord­ing to the former chief ac­tu­ary of the CLASS of­fice. “We have some de­sign con­cepts that we think work,” said Bob Yee, who held that role un­til re­cently. “When I say, ‘we,’ re­ally it rep­re­sents the works of the CLASS of­fice,” he said. He out­lined those con­cepts in a nearly 50-page re­port to CLASS Ad­min­is­tra­tor Kathy Green­lee. “And all of these con­cepts are de­signed to con­trol the ad­verse-se­lec­tion prob­lem that most peo­ple think are non-work­able.”

Yee’s re­port—which also was in­cluded in Green­lee’s full re­port on CLASS to Se­be­lius—de­scribes in great de­tail three pos­si­ble de­signs: a phased en­roll­ment al­ter­na­tive that uses some risk-mit­i­gat­ing prac­tices from group long-term-care in­sur­ance; a tem­po­rary ex­clu­sion de­sign in which no ben­e­fits will be paid dur­ing the first 15 years of an in­di­vid­ual’s en­roll­ment; and a lim­ited ini­tial ben­e­fits plan, which pays a low ben­e­fit (for in­stance, $5 a day) if the ben­e­fit is claimed dur­ing the first 20 years and reg­u­lar ben­e­fits (say, $50 a day) other­wise.

The de­signs are pre­sented from an ac­tu­ar­ial, not a le­gal, per­spec­tive. And it was bal­anc­ing those two guide­lines—fi­nan­cial sus­tain- abil­ity and le­gal­i­ties of the statute—that posed prob­lems for HHS, Green­lee told re­porters when HHS said it would not im­ple­ment the pro­gram.

But the work of Yee and his staff shows prom­ise for de­vel­op­ing CLASS be­cause it proves there are ideas to build on, said Dr. Ch­eryl Phillips, a geri­a­tri­cian who serves as se­nior vice pres­i­dent of ad­vo­cacy at Leadin­gAge, which rep­re­sents not-for-profit long-term-care providers. Long-term care av­er­ages about $75,000 a year in a nurs­ing home, and fewer than one-third of se­niors can af­ford three months of long-term care, she said.

“The safety net we cur­rently have is Med­i­caid,” Phillips said. “That is of­ten de­fined by nurs­ing home cov­er­age,” she said. Peo­ple very quickly de­plete their as­sets to a level that makes them el­i­gi­ble for Med­i­caid, and then the only op­tion is a nurs­ing home.

Phillips said the CLASS Act has be­come a par­ti­san is­sue not be­cause of its con­cept, but be­cause it was linked to the Af­ford­able Care Act, which Repub­li­cans are work­ing to dis­man­tle. “I hap­pen to be fis­cally con­ser­va­tive and rightlean­ing, but I know we don’t have any other pro­gram for a grow­ing, needy pop­u­la­tion,” Phillips said. She views the core of CLASS—in which par­tic­i­pants pay in to a sys­tem, meet strict cri­te­ria, and di­rect the funds—as Repub­li­can­minded prin­ci­ples.

Some Repub­li­cans in Congress don’t think so. Rep. Charles Bous­tany (R-La.), a physi­cian, and Sen. John Thune (R-S.D.) in­tro­duced bills this year to re­peal CLASS.

Mean­while, a White House spokesman said in an e-mail that re­peal­ing CLASS isn’t nec­es­sary or pro­duc­tive, and that the fo­cus should be find­ing so­lu­tions to the cost of long-term care.

Bous­tany, though, said in an in­ter­view that he and some of his col­leagues want to elim­i­nate the pos­si­bil­ity that CLASS will resur­face. “We want to put it to rest and fi­nal­ize get­ting rid of this pro­gram.”

HHS of­fi­cials were not avail­able for in­ter­views last week, and a spokes­woman said only that the agency has no fur­ther up­dates on the pro­gram. One ques­tion that lingers is why the ad­min­is­tra­tion never ap­pointed an independent ad­vi­sory coun­cil for CLASS, which was re­quired in the law. Yee, Gar­ner and Phillips all said an independent panel could help move the pro­gram in the right di­rec­tion.

The CLASS Act was en­vi­sioned as an af­ford­able, long-term-care pro­gram, but HHS has not found a way to im­ple­ment it.

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