CBO: CLASS Act could eventually contribute to deficit

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Survey: Facility satisfaction rises among LTC consumers
Survey: Facility satisfaction rises among LTC consumers

The Community Living Assistance Services and Supports (CLASS) Act, which appears in House and Senate healthcare reform legislation, could wind up adding tens of billions of dollars to the federal deficit, according to a Nov. 25 analysis from the Congressional Budget Office.

The CLASS Act is designed to provide Americans with federally backed long-term care and disability insurance. During the first two decades, the CLASS Act should reduce the deficit, according to the CBO. The House version would save $102 billion between 2009 and 2019, while the Senate version would save $72 billion. Between 2020 and 2029, the program would continue to save money, though the benefits would not be as considerable, according to the CBO.

After 2030, however, the program will likely begin losing money, Douglass Elmendorf, director of the CBO, suggested. The sum of benefit payments and administrative costs would probably exceed premium income and savings to the Medicaid program, according to Elmendorf's letter to Rep. George Miller (D-CA), who requested the analysis. In succeeding decades, the program would add to the federal deficit “by amounts on the order of tens of billions of dollars for each 10-year period,” Elmendorf said.

Still, the CBO's analysis acknowledged a level of uncertainty in evaluating the future solvency of such a program. Factors such as the number of enrollees and the health of those who participate in the program could significantly alter the CLASS Act's effect on the budget deficit, according to the analysis.

See McKnight's interviews with Larry Minnix and Barbara Manard, of the American Association of Homes and Services for the Aging. They talked about the CLASS Act during the AAHSA conference last month.


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