Fred C Church

The CLASS Act, a law which would have set up a voluntary long-term care insurance program, was recently repealed by the U.S. House of Representatives.

The program was abandoned by government officials some time ago, after a review of the structure revealed it would be at high risk of becoming financially unsound about five years after beginning. Health and Human Services Secretary Kathleen Sebelius said it was "totally unsustainable," based on actuarial research.

The projected problems stem from expectations that the program would draw participants who needed the assistance, with not enough healthy individuals paying in to offset them. As a result, premium costs would likely have reached untenable levels.

Some members of the House of Representatives indicated the repeal of the bill will allow new legislation setting up a more viable program, but clear alternatives have not yet come to light. Similarly, it is uncertain what modifications supporters of fixing the program rather than eliminating it would make.

Long-term care insurance may become increasingly important as the national workforce and population continue to age, particularly with concerns over retirement care needs and the possibility of outliving retirement savings. The lack of federal policy may represent an opportunity or need for employers to formulate business insurance policies that offer long-term care coverage, which is not necessarily part of typical health insurance benefits.