Harold Pollack is a professor at the University of Chicago School of Social Service Administration and Special Correspondent for The Treatment
I’ve written before on the CLASS (Community Living Assistance Services and Supports) Act, an important but costly and complex disability provision in health reform. CLASS’s future may be determined this week.
For the uninitiated, CLASS is a voluntary program in which workers can pay a monthly premium which would entitle them to monthly cash payments in the event of disability. Recipients could use this money to buy ramps and other equipment, assistance from home health care workers, and other goods or services that promote independence and personal well-being.
CLASS is included in the Senate HELP Committee and House bills. Much of the disability community has rallied around it, including some 275 advocacy groups and organizations. CLASS also derives odd political benefit from the Congress’s mechanical health reform budget scoring rules. CLASS front-loads revenues by requiring a 5-year vesting period before individuals are eligible to receive benefits. It therefore produces billions of dollars in premiums that count as apparent surplus under the next decade.
The Senate Finance Committee is a tad more skeptical. The depth of opposition among fiscal conservatives is exemplified by Senator Conrad’s description of the CLASS Act as "a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of." Conrad’s comment infuriates CLASS supporters, who note that this legislation, and its 5-year vesting period, were proposed and debated years before the 2009 health reform and its accompanying 10-year budget scoring rules.
On Friday, Richard Foster, Chief Actuary at the Centers for Medicare and Medicaid Services released a tough report on key provisions of health reform. As a matter of organizational structure and historic practice, CMS actuaries do not speak for the Department of Health and Human Services or for the Obama administration. They certainly didn't this time. This was the kind of report that evokes the term unhelpful among unhappy Democrats.
Buried inside this controversial report, the actuaries conclude that CLASS will produce $39 billion in net federal budget savings by 2019. Premiums are sufficient to meet program obligations until 2025. That’s the good news.
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