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Statement of Need: About 14 million people spend more than $230 billion a year on long-term services and supports to assist them with daily living. Four times that many rely solely on unpaid care provided by family and friends. Medicare does not pay for long-term care, and while Medicaid is the largest public payer of these services, it is only available for people with few other resources. The CLASS program represents a significant new opportunity for all Americans to prepare themselves financially to remain as independent as possible under a variety of future health circumstances.

Summary of the Legal Basis: Section 8002 of Public Law 111-148 (Affordable Care Act) requires the promulgation of regulations to implement the CLASS program. Specifically, the law states, “[t]he Secretary shall promulgate such regulations as are necessary to carry out the CLASS program in accordance with this title. Such regulations shall include provisions to prevent fraud and abuse under the program.”

Alternatives: Under the law, the Secretary, in consultation with appropriate actuaries and other experts, will develop at least three actuarially sound benefit plans as alternatives for consideration for designation by the Secretary as the CLASS Independence Benefit Plan. Under the law, the Secretary will designate the final benefit plan by October 1, 2012.

Anticipated Costs and Benefits: The program will help Americans prepare themselves financially to remain as independent as possible under a variety of future health circumstances and their financial independence may help reduce spending down to Medicaid. Costs to implement the proposed regulation have not yet been estimated.