Howard Gleckman, author of “Caring for Our Parents” does a superb job of explaining the difficulties facing the CLASS Act program (Community Living Assistance Services and Support Act).  In order for the CLASS Act program to be successful, the federal government will have to balance a lot of competing interests.

The Secretary of Health and Human Services (HHS) needs to try to maximize enrollment in order to keep the program solvent because taxpayer dollars cannot be used to pay any of the claims made by the participants (enrollees).

It is a voluntary program.  Every employee (or self-employed person) can choose to opt-out of the CLASS Act program.  Therefore, if premiums are too high, not enough healthy employees will enroll in the program–they will simply opt-out.  If premiums are too low, it will become insolvent because the only people who will participate will be those with severe disabilities and chronic illnesses.

Although the CLASS Act program “became effective” on January 1, 2011, they have only begun to hire staff and set up the offices in the Administration on Aging.  The exact benefits and premiums will probably not be determined by the Secretary of HHS until October 2012.  Enrollment for the CLASS Act program will probably begin in the first or second quarter of 2013.

Here is a link to Howard Gleckman’s superb eight-minute interview with the Urban Institute: