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July 10, 2007 **BILL SUMMARY, ADDITIONAL INFORMATION, AND LIST OF SUPPORTERS INCLUDED WASHINGTON, D.C — Today, Senators Edward Kennedy and Tom Harkin and Representatives John Dingell and Frank Pallone introduced the Community Living Assistance Services and Supports (CLASS) Act of 2007 that would create an insurance program for adults who become functionally disabled. The measure would provide a cash benefit to help obtain services and supports, while providing those with disabilities more choices on community participation, education, and employment. Currently there are 10 million Americans in need of long term care services, and the number is expected to increase to near 15 million by 2020. Too often, many individuals are forced to live in poverty just so they can qualify for Medicaid to get the care they need, which is counter to the American way. Because of its common sense approach to helping Americans take their future into their own hands while saving taxpayer dollars, the CLASS Act has gained the support of over 100 groups representing the disabled, the elderly, and America’s workers. “Too many Americans are perfectly capable of living a life in the community, but are denied the supports they need,” said Senator Kennedy. “They languish in needless circumstances with no choice about how or where to obtain these services. Too often, they have to give up the American Dream – the dignity of a job, a home, and a family – so they can qualify for Medicaid, the only program that will support them. The bill we propose is a long overdue effort to offer greater dignity, greater hope, and greater opportunity. It makes a simple pact with all Americans – ‘If you work hard and contribute, society will take care of you when you fall on hard times.’” “The CLASS Act is a cost effective way to ensure individuals maintain freedom of choice throughout every stage of life,” said Senator Harkin. “This bill paves the way for more Americans to live independently and with dignity.” "By removing barriers to independence, the CLASS Act will enable more Americans to remain in their communities and empower more individuals to make their own choices." said Congressman Dingell. "As America continues to age, we are faced with an impending crisis in long term care," Congressman Pallone said. "Today, we offer a new approach that builds upon our existing safety net system and helps our elderly and disabled finance the long term care they need to remain active and productive members of their communities." The CLASS Act is an important step in the evolution of public policy because it is a framework based on the principles of independence, choice, and empowerment. It is the framework needed to help individuals gain the access they need to live independently. The CLASS Act does this by establishing a national insurance program to be financed by voluntary payroll deductions to provide benefits to adults who become severely functionally impaired. To qualify for benefits, individuals must be 18 years old and have contributed to the program at least 5 years. All working adults will be automatically enrolled in the program, unless they choose not to be. There are two benefit tiers: Tier 1 benefits ($50/day) will be payable to eligible individuals who have 2 or more impairments on Activities of Daily Living (ADLs) or the equivalent cognitive impairments. Tier 2 benefits ($100/day) will be payable to individuals who have 4 or more ADLs or the equivalent cognitive impairment. This legislation builds on the promise and the possibility of the Americans with Disabilities Act, and respects the rights and dignity of all Americans — especially our disabled and senior citizens, to live their life as they choose. ### Summary of the CLASS Act of 2007 Purpose of the Bill To help adults with severe functional impairments obtain the services and supports they need to stay functional and independent, while providing them with choices about community participation, education and employment. Background Currently there are 10 million Americans in need of long term services and supports, and the number is expected to increase to near 15 million by 2020. Most private-sector disability or long-term care insurance plans are constrained in the insurance protection they can offer at an affordable price, and neither Supplemental Security Insurance (SSI) nor Old, Age, Survivors, and Disability Insurance (OASDI) programs have any benefit differentials related to the extent and character of the disability. Thus, most Americans who have or develop severe functional impairments can only access coverage for the services critical to their independence (such as housing modifications, assistive technologies, transportation, and personal assistance services), through Medicaid. Their reliance on Medicaid for critical support services creates a strong incentive for them to “spend down” assets and remain poor and unemployed. With Medicaid paying 50% of the costs of long term services, increased expenditures on long term services are expected to add $44 billion annually to the cost of Medicaid over the next decade. Overview of the Legislation The CLASS Act will offer an alternative path. It will create a new national insurance program to help adults who have or develop functional impairments to remain independent, employed, and stay a part of their community. Financed through voluntary payroll deductions of $30.00 per month (with opt-out enrollment like Medicare Part B), this legislation will help remove barriers to independence and choice (e.g., housing modification, assistive technologies, personal assistance services, transportation) that can be overwhelmingly costly, by providing a cash benefit to those individuals who are unable to perform 2 or more functional activities of daily living. The large risk pool to be created by this program approach will make added coverage much more affordable than it is currently, thereby reducing the incentives for people with severe impairments to “spend down” to Medicaid. It will give individuals added choice and access to supports without requiring them to become impoverished to qualify. The CLASS Act is an important step in the evolution of public policy toward a new focus on helping individuals overcome barriers to independence that they may confront due to severe functional impairments. It is an important extension of concepts embodied in the Individuals with Disabilities Education Act (IDEA), the Americans with Disabilities Act of 1990 (ADA), and Ticket to Work and Work Incentives Improvement Act of 1999. Specifics of the bill Scope: Enrollment in the Program: Triggering the Benefit: Benefits: To account for differences in independence support needs, there will be two cash benefit tiers.
The monthly case benefit will be posted monthly to a debit account or a “Choice Account”. Individuals who do not use the full monthly amount may roll it over from month to month, but not year to year. However, once an individual becomes ineligible for CLASS benefits (by improvement in functional status or death), CLASS Act benefits will cease. Any residual balance of available services remaining on the individual’s account will not be payable. If an eligible individual does choose to move into an institutional facility, CLASS Act benefits will be used to defray those associated expenses. Relationship of CLASS Act Insurance Program to Social Security Disability Insurance Eligibility for CLASS Act benefits will be independent of whether or not an individual is eligible for SSDI, so participation in the CLASS Act insurance program will not impair an individual’s ability to remain qualified for SSDI. Relationship of CLASS Act Insurance Program to Social Security Retirement Benefits Similarly, eligibility for CLASS Act benefits will be independent of retirement benefits eligibility. Relationship to Medicaid If an individual is eligible for CLASS Act benefits, and are also eligible for the long term care benefit under Medicaid, CLASS Act benefits can be used to offset the costs to Medicaid, thus producing Medicaid savings for the state. Relationship to Private Long Term Care Insurance The “Class” program benefit does not replace the need for basic health insurance --- it provides a mechanism to pay for those non-medical expenses that allow a disabled person to remain independent. The “Class” program benefit can be an addition to long term care insurance. It provides a consistent, basic cash benefit to glove with the insurance products that provide more intense medical services over a shorter period of time. THE CLASS ACT Our nation has too long ignored the emerging crisis of addressing the long-term service and support needs of seniors and younger persons with disabilities in a fiscally responsible manner that promotes independence, choice and helping families. Over 60 diverse national organizations have come to together to support the bipartisan CLASS Act (Community Living Assistance Services and Supports), which will soon be reintroduced. We urge you to contact Connie Garner with Senator Kennedy’s office at 224-6390 to become an original cosponsor the proposal. Our current system forces people prematurely into institutions, requires many to spend-down into poverty before receiving the help they need, fails to provide realistic opportunities for personal responsibility, and fails to support families. America can and must do better. The CLASS Act addresses these problems, can receive broad support, and can provide a vehicle for our nation to come together to discuss the challenges we face in a meaningful, productive way. Key elements of the CLASS Act include:
To qualify for CLASS Act benefits, individuals must have contributed $30 in monthly premiums, through a voluntary payroll deduction (unless they choose to opt-out), for at least 5 years. Tier 1 benefits ($50/day) will be payable to individuals unable to perform 2 or more ADLs or have the equivalent cognitive impairment. Tier 2 benefits ($100/day) will be payable to individuals unable to perform 4 or more ADLs or have the equivalent cognitive impairment. These types of voucher payments avoid bureaucracies, and empower consumers by enabling them to control what services they get, how, where and from whom. These benefit levels would respectively cover only about one-quarter or one-half of the current average cost of nursing home care, thereby retaining an important role for private insurance. This balanced public/private sector approach was supported by the 63 diverse members of Citizens for Long-Term Care, which included insurer and employer groups, chaired by former Republican Senator David Durenberger. The coalition agreed on a structure envisioned under the CLASS Act, with a broad-based public program that would “provide a minimum floor of protection in a way that is sufficiently flexible to best help families and disabled individuals meet their unique circumstances.“ The CLASS Act will help employers by providing support both to persons with disabilities to better enable them to work, and to working caregivers to help reduce absenteeism and maintain productivity. The proposal can also relieve some of the current pressure on employers to pay for part of the cost of long-term supports and services their employees’ families need. The CLASS Act of 2007 ADAPT Press Contact:
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