CLASS Act on the chopping block in deficit reduction proposal

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Gang of Six proposal would gut CLASS Act

The “Gang of Six” plan to reduce the federal deficit, released Tuesday, recommends eliminating a disability insurance program for in-home care that was created as part of the Obama health care reform.

The Community Living Assistance Services and Supports Act, championed by the late Senator Edward M. Kennedy and disability advocacy groups, created a system that allows individuals, through their employer, to pay into a disability insurance program to provides cash benefits for assistance with daily activities, such as dressing, bathing and eating, according to an article in the Boston Globe. Because the payments are made through the individual’s premiums, no taxpayer money is involved.

Details of the program are still being developed by the Department of Health and Human Services. They are scheduled for completion by Oct. 1, 2012.

Advocates of the CLASS Act argue it will reduce future health care costs, such as Medicaid costs, by allowing individuals to stay in their homes and avoid institutionalized care.

“What’s strange to me is that this started out as a cost saver, and now it’s being targeted in the name of cost savings,” said Judy Feder, a professor at the Georgetown Public Policy Institute and fellow at the Urban Institute, in an article in Politico. “The people who are saying it will cost us money say that that’s a challenge that cannot be met, but I believe it can.”

Some analysts worry the program will be unable to attract many individuals outside of the sickest and most at-risk populations, quickly driving up costs in the process and raising the risk of taxpayer-funded bailouts for the program.

The Alan Simpson, Erskine Bowles deficit commission recommended repealing, or reforming, the CLASS Act in its plan released in December.

“The program attempts to address an important public policy concern – the need for non-institutional long-term care – but it is viewed by many experts as financially unsound,’’ the commission stated.

In contradiction to the commission, the Congressional Budget Office estimates the CLASS Act will reduce federal spending by $83 billion between 2012 and 2021.

The Gang of Six, whose proposal would cut an estimated $3.7 billion from the deficit over 10 years, includes senators Saxby Chambliss (R-GA), Michael Crapo (R-ID), Mark Warner (D-VA), Kent Conrad (D-ND), Richard Durbin (D-IL) and Tom Coburn (R-OK).