The Community Living Assistance Services and Support (CLASS) Program, was created to provide assistance for individuals who need long-term care (LTC) services and have difficulty with activities of daily living. CLASS is the first federal and consumer financed LTC program in the United States
CLASS is a voluntary, government-run LTC insurance program that offers participants a single benefit plan with a daily cash benefit of $50, indexed to inflation. Beneficiaries can use the money to purchase nonmedical services to use either at home or at their chosen residence. There is no limit on how long a person can receive benefits through CLASS.
Currently, nursing home costs can average approximately $75000 per year while home care costs $20 an hour, these prices will increase in the succeeding years. Long term care services are utilized by elderly individuals and widely needed by people with disabilities. The CLASS Act also aims to revamp the untenable provisions in Medicaid by introducing consumer funded scheme that won’t affect the overall public budget and mitigating the asset limit requirement. Most of the provisions in the CLASS Act aim to lessen the impact of outrageous long term care effects on people.
However, there are many concerns about the long-term fiscal soundness of the CLASS plan. The consensus of the American Academy of Actuaries is that CLASS poses “a significant and likely risk that, in a relatively short time period, the program will either need increased premiums and/or significant reductions. CLASS reduces the deficit in the short run because the government collects premiums for five years (2012–2016) but pays no benefits. The Congressional Budget Office estimates that premium payments into CLASS will exceed benefit payments out of CLASS only until 2030; the Centers for Medicaid and Medicare Services approximates that this will happen in 2025. Subsequently, CLASS adds to yearly federal budget deficits.