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Read our clairvoyant piece about the dissolution of the CLASS Act. Written in early October, 2011 and was featured in our October newsletter.
 
CLASS Dismissed?   
 
The late Senator Edward Kennedy wanted to leave a legacy that would allow an aging generation to live a more socially-respectable lifestyle. We at DI & LTC absolutely agree with this ideal, and that is the primary reason we are in the benefits business.
 
No matter your views on Ted Kennedy's life and politics, he aimed to accomplish this with a quiet piece of legislation that was passed in the much louder Patient Protection and Affordable Care Act (PPACA). It was called the Community Living Assistance Services and Supports Act or, quixotically dubbed, The CLASS Act.
 
It was set up to support those who could not medically qualify for private Long-Term Care by allowing all employees access to this large pool of benefits. It requires a 5-year vesting period in which an employee has to be paying premiums, and while working for a certain number of years out of those 5 years vested.
 
CLASS's fatal flaw is in the estimated underwhelming participation rate by healthy Americans compared to the vast amount of benefits that would be paid to the "adversely select" pool of participants. This is more commonly known as "the death spiral."
 
Most of the departmental construction of this law was to be shelved until late this year. However, news of the CLASS Act has resurfaced. Sources have reported that funding was drastically cut for the program, staff employment was frozen or commissioned to other departments, and the chief actuary left to return to the private sector.
 
While it looks as if CLASS is all but dismissed, we need to understand that we haven't completely dodged the bullet. Far too many people rely on Medicare and Medicaid as a form of LTC. Neither of these systems are designed to absolve the burden of this aging generation. 
 
The CLASS Act almost organized a dialogue about this increasing problem. Since CLASS looks as though it will not come to fruition, it is again our job to create this dialogue. Please do not shy away from your obligation. Start talking about long-term care insurance and start today.