Caregiver benefits: The CLASS Act
On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act into law. The health reform law, as amended by the Health Care and Education Reconciliation Act of 2010, establishes a national, voluntary insurance program for purchasing community living services and supports known as the Community Living Assistance Services and Supports program (CLASS Act).
The CLASS program is designed to expand options for people who become functionally disabled and require long-term services and support. The CLASS program was effective on January 1, 2011. The HHS Secretary defined the CLASS benefit by October 2012 with enrollment to begin subsequently. This issue brief describes the major components of the CLASS program including eligibility, benefits, financing, and interaction with Medicaid.
Key elements of the CLASS program:
• WHO CAN ENROLL IN CLASS? Working adults will be able to make voluntary premium contributions either through payroll deductions through their employer or directly.
• WHO IS ELIGIBLE FOR BENEFITS? Adults with multiple functional limitations, or cognitive impairments, will be eligible for benefits if they have paid monthly premiums for at least five years and have been employed during three of those five years.
• WHAT ARE THE BENEFITS? Adults who meet eligibility criteria will receive a cash benefit that can be used to purchase non-medical services and supports necessary to maintain community residence; payments for institutional care are permitted. The amount of the cash benefit is based on the degree of impairment or disability, averaging no less than $50 per day.
• HOW IS THE PROGRAM FINANCED? CLASS is financed by voluntary premium contributions paid by working adults, either through payroll deductions or direct contributions.
• HOW DOES CLASS INTERACT WITH MEDICAID? CLASS will generally be the primary payer for individuals who are also eligible for Medicaid.
The CLASS program gives working adults the opportunity to plan for future long-term care needs by providing a basic cash benefit to those who meet work requirements and have either functional or equivalent cognitive limitations.
CLASS is designed to help individuals with functional and/or cognitive limitations remain in the community by purchasing non-medical services and supports such as home health care and adult day care.
While the CLASS benefit is not designed to cover the entire costs associated with long-term care needs, it is structured to help offset the costs incurred by millions of adults with chronic and disabling conditions.
CLASS has the potential to reduce reliance on Medicaid and provide relief for family caregivers. However, the payout of CLASS benefits will not take effect until 2017, leaving many current seniors and people with disabilities without affordable options to finance long-term care in the short-term.
Going forward it will be important to monitor the affordability of premiums and the adequacy of benefits for CLASS enrollees as well as participation rates that will impact the solvency of the program.