CLASS Act Abandoned

According to The New York Times, President Obama’s administration announced on October 14, 2011 that it was abandoning a government-run insurance program for long-term care authorized by the federal health care reform law. The program was called the Community Living Assistance Services and Supports (CLASS) Act. Officials from the Department of Health and Human Services said premiums for the program would be so high that very few healthy people would sign up, leading to adverse selection. Adverse selection refers to the tendency of poorer risks (e.g., older and sicker people) using insurance to a greater extent than better risks (e.g., younger and healthier people). For more information about the CLASS Act, see OLR Research Report 2010-R-0313.