Comparing the WISH Act with the Withdrawn CLASS Act

Federal catastrophic long-term care insurance as proposed by the WISH Act is fiscally sound and quite different from the withdrawn CLASS Act.

Many influential advocates and legislators remember the CLASS Act, which was part of the Affordable Care Act in 2010. Advocates and political leaders had to put a great deal of effort into having the ACA include the CLASS insurance scheme to support people living with disabilities. The final law required that CLASS be fiscally neutral, but the fact that it would be voluntary led to estimates that only a few percent of the population would buy in, and that the group paying in would include a disproportionate number of people with high risks, including many already having disabling conditions. This made the premiums prohibitively expensive and the program unsustainable. Thus, the CLASS Act was never implemented and was repealed in 2013. The disappointments of advocates and legislators might lead them to ask how the WISH Act would be different. The most striking difference is that WISH would not be voluntary and thus would maintain the largest possible pool of contributors and beneficiaries, with no opportunity for the adverse selection that afflicted CLASS. The table below is meant to illuminate the array of differences.

DOMAINThe WISH Act proposalThe CLASS Act, withdrawn
Federal vs. State programFederalFederal
ParticipationMandatoryVoluntary (mandatory with opt out)
Eligible populationAll U.S.workersAnyone 18+ choosing to participate.  They also must receive wages or income that are subject to the Social Security tax and meet minimum work-quarter requirements, except for patients in a hospital or nursing facility, ICF/MR, IMD, or Medicaid beneficiary
Vesting requirementsFull benefits with 10 years contributing, partial down to 5 quartersContributed into the program for at least 5 years
Benefit eligibility triggersUses HIPAA triggersUses HIPAA triggers
Type and Amount of Benefit PaymentCash benefit paid monthly, roughly $120/day, indexed to inflation and wage costs in long-term careCash benefit paid monthly, TBD but roughly $50/day.  Might be based on degree of disability.  Benefit rolls over month to month but not beyond a calendar year.
Covered ServicesNot applicable because it is a cash benefitNot applicable because it is a cash benefit
Coverage Duration (front vs. back vs. comprehensive)Catastrophic/Back End, unlimited duration once disability trigger(s) are met and after an up-front waiting periodAs long as the qualifying disability lasts
Waiting Period Before Benefits BeginVaries from 1 year to 5 years, based on lifetime incomeNone
Premium estimate0.3% of wages from employee, matched by employer (or 0.6% for self-employed)Premium estimates averaged $123/month for a $75/day benefit, but the CMS actuaries later estimated $240/month. Premiums could have increased, except for older retirees.
Finance sourceMandatory premiums from payroll deductionsFinanced through monthly premiums paid by voluntary payroll deductions
Opportunity for private market supplementFront-end coverage with private LTCI and caregiver support programs easily fit and carriers would be relieved of most of the “tail” riskLTC insurance could “top off” CLASS coverage or continue to sell to individuals who opt-out and pass underwriting.
Coordination with other programsIncome from WISH would not count against eligibility for other federal programs, but income from WISH could mitigate the level of benefits for low-income programs such as Medicaid nursing home care.Eligibility for CLASS program benefits would have no effect on eligibility for Medicaid, Medicare, Social Security retirement, survivors, or disability benefits or Supplemental Security Income (SSI) benefits.  Medicaid is the payer of last resort where there is duplication but enrollees can retain a small portion of their CLASS cash benefit when both payment sources apply.
Inflation ProtectionAdjusted for inflation and direct service worker wages.Adjusted for inflation but details not specified.
Comparison of the WISH Act proposed with the CLASS Act, which was withdrawn.

Since a decade has passed since the enactment and withdrawal of CLASS, advocates for federal catastrophic long-term care insurance should generally use this comparison only with people for whom the effort and disappointment of CLASS are still salient, and who ask about the merits of the WISH Act in comparison.

Author: Dr. Joanne Lynn

Dr. Lynn is a geriatrician and hospice physician doing advocacy and research to improve eldercare. She encourages better financing models for long-term care and demonstration projects to improve eldercare in communities. Dr. Lynn has published over 300 peer-reviewed medical research and policy articles.

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