On October 14th, the Obama administration announced that is was abandoning a government-run, voluntary, long-term care insurance program authorized by the federal health care reform law. The program, Community Living Assistance Services and Supports (CLASS) Act, was deemed too difficult to implement.
The main criticism of the program has been the potential for adverse selection, where too many sick or disabled people enroll without enough younger, healthier enrollees paying premiums to balance the risk.
According to a federal Department of Health and Human Services analysis of the CLASS Act, officials have been unable to create a program that is “actuarially sound for the next 75 years” as the federal health care reform law requires.
OLR Report 2010-R-0313 provides a summary of the CLASS Act.
