Long-Term Care Program Is Casualty of "Fiscal Cliff" Deal

The final budget deal Congress passed to avert the “fiscal cliff” repeals a long-term care insurance program that would have helped keep the elderly and disabled out of nursing homes and off the Medicaid rolls.  In its place, the budget bill establishes a commission to come up with an alternative plan to make long-term care available for those who need it.

The Community Living Assistance Services and Supports (CLASS) Act, part of the health reform bill and Sen. Edward M. Kennedy's final legislative legacy, would have established a voluntary national long-term care insurance program offering basic help for the elderly and disabled. Employees who wished to participate would have paid into it, much like they pay into Social Security, and would have received a modest daily benefit if they required long-term care.

The Obama administration suspended implementation of the CLASS Act in October 2011 over concerns that the program could not be self-supporting, but the administration had resisted calls to repeal the law, hoping that changes could make it financially viable.

But the administration’s resistance ended during negotiations over legislation to avert higher tax rates for all Americans.  According to The New York Times, repeal of the CLASS Act was one of the “sweetener” provisions thrown in by both parties to attract votes.  The Times notes that Senate Republican leader, Mitch McConnell (R-KY), who was an architect of the budget deal, had criticized the CLASS Act, saying it was “destined to fail in the real world.”  

But reportedly at the insistence of Sen. Jay Rockefeller, (D-W.Va.), the measure establishes a 15-member Commission on Long-Term Care that is to recommend legislation in about six months.  (The Commission’s mission and powers are described beginning on page 120 of the budget bill.)  The Commission will be a bipartisan body consisting of members to be appointed by the President and congressional leaders within one month of the budget bill’s enactment.  Members will represent the interests of the elderly, consumers of long-term care services, family caregivers, private long-term care insurance providers and employers, among others.