CLASS is Out

A long-term insurance plan enacted under the healthcare-reform law — the Community Living Assistance Services and Support Act — has been eliminated by the U.S. Department of Health and Human Services because it is unaffordable.

In a letter to Congress released on Friday, HHS Secretary Kathleen Sebelius wrote:

“Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time,” Sebelius wrote.

According to an article on

The law required the administration to certify that CLASS would remain financially solvent for 75 years before it could be put into place.

But officials said they discovered they could not make CLASS both affordable and financially solvent while keeping it a voluntary program open to virtually all workers, as the law also required.

Monthly premiums would have ranged from $235 to $391, even as high as $3,000 under some scenarios, the administration said. At those prices, healthy people were unlikely to sign up. Suggested changes aimed at discouraging enrollment by people in poor health could have opened the program to court challenges, officials said.

“If healthy purchasers are not attracted … then premiums will increase, which will make it even more unattractive to purchasers who could also obtain policies in the private market,” Kathy Greenlee, the lead official on CLASS, said in a memo to Sebelius. That “would cause the program to quickly collapse.”

David Shadovitz wrote in HREOnline™ about the law when it was made voluntary instead of mandatory — with experts saying that it would post “a host of educational and administrative challenges” for employers.