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Why the Latest CLASS Act "Report" is Wrong

by Published On: Sep 19, 2011

On Sept. 15, the "Repeal CLASS Working Group," congressional critics of the Community Living Assistance Services and Supports (CLASS) Act, released CLASS' Untold Story: Taxpayers, Employers, and States on the Hook for Flawed Entitlement Program, a report that suggests the program is not financially feasible. However, the report itself is flawed in that it cites outdated estimates of CLASS, and rehashes early arguments that have since been addressed. 

The CLASS Act continually evolved over the many months that health care reform was under consideration, especially with the addition of a Sen. Judd Gregg (R-NH) amendment requiring the program to be made feasible over a 75-year period.

The CLASS Act promotes personal responsibility, puts choice in the hands of consumers, saves Medicaid money, and does NOT rely on taxpayer funds:

  • Its cash benefit approach allows consumers to choose the type of help they want.
  • It reduces the federal budget deficit by $86 billion over 10 years.
  • It saves Medicaid money. 
  • It is not a government entitlement program and stands on its own financial feet. In fact, the health care law prohibits the use of taxpayer funds to pay for benefits under the CLASS Act.

Moreover, a 2011 Kaiser Family Foundation/ Harvard poll found that 76% of Americans supported the CLASS Act.

Numerous mechanisms were put in place to ensure the integrity of the program. The secretary of the U.S. Department of Health and Human Services (HHS) is now working to create the actual insurance program, and we should let her do that rather than rehashing arguments that are old and out of date.   

CLASS Act Alternatives?

Critics of the CLASS Act have avoided one simple question: How are long-term services and supports to be financed? In criticizing the CLASS Act for being “a flawed entitlement program,” these critics completely overlooking the fact that an open-ended entitlement program, Medicaid, currently is the primary source of financing for long-term services and supports.

Medicaid is a huge burden on both federal and state budgets, and the largest portion of Medicaid spending goes to long-term services and supports. One of the primary goals of the CLASS Act was to take some of that burden off of Medicaid. The Congressional Budget Office (CBO) recognized reduced use of Medicaid as part of the budgetary savings it projected for the CLASS Act.

We continue to strongly support the implementation of the CLASS Act for financing long-term services and supports.

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