Setting premiums could present obstacle for CLASS Act implementation, expert says

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Anne Tumlinson
Anne Tumlinson

The Community Living Assistance Services and Supports Act, or the CLASS Act, which was created under the Patient Protection and Affordable Care Act, has a few hurdles to clear after the midterm elections before it can become a success. That was the message discussed Tuesday morning at the “Implementing the CLASS Act: Financing Long-Term Care in the United States” forum held at the National Press Club.

Anne Tumlinson, senior vice president of Avalere Health, talked about the difficulty of setting premiums for CLASS Act enrollees. Since CLASS Act is voluntary, anyone who is currently working can pay into the program through premiums taken out of their paycheck. But this presents a problem for setting premium rates, said Tumlinson.

“People with chronic diseases, such as diabetes, or a disability are the most likely to enroll,” Tumlinson said, likening the decision to buying health insurance. “Healthy people are more likely to wait. If the only people who sign up are those with chronic illnesses, the premiums go up for everyone.”

Fortunately, Tumlinson says the program's administrators will be able to determine pretty quickly—within two years—whether or not CLASS Act is successful. If people rush to sign up, that bodes well for the program since it means the premiums are low enough to afford.

Tumlinson said CLASS Act could generate revenue, as much as $72 billion over the first 10 years. Such an argument should make it harder for budget-minded Republicans to repeal the act with their proposed healthcare reform changes, she said.

Josh Wiener of RTI International, which sponsored the forum, discussed CLASS Act eligibility triggers, which need to be laid out before the law can be implemented. Wiener says policy makers have several implementation issues to consider, such as: how CLASS should be marketed; how eligibility should be determined; how much the benefits should be worth and what can they be used for; what the relationship between CLASS and private long-term care insurance is; and how enrollment will take place.