No CLASS - the continuing gap in personal assistance insurance

Objective: To assess the size and composition of the middle-aged (40-65) adult population that was willing to purchase long-term care and personal assistance insurance through the CLASS Act (passed as part of the ACA but not enacted).

Study Design: We examined 2011 data from the Adult Supplement to the National Health Interview Survey (NHIS) to determine which groups – of adults ages 40-65 -- were interested and uninterested in purchasing long-term care (LTC) supplemental insurance (daily cash benefits) as defined in the CLASS Act.

Findings: An estimated 25.8 million adults aged 40-65 (26.7%) said they would be interested in purchasing supplemental insurance proving $50 per day to secure help with ADLs. Desire to buy coverage increased with age, education and existing work limitation and was higher for those identifying as Black or Hispanic, having family experience with ADL needs and expecting to need personal assistance. Respondents were price-sensitive: 55.7% said they would be willing to pay only $1-$24 per month for coverage.

Implications: Implementation of the CLASS Act was set aside due to actuarial and legal uncertainties. Chief among these was the concern of adverse selection and how to estimate reasonable premiums. These findings suggest that these concerns are valid; however, the lack of publicly subsidized insurance for long-term care and personal assistance remains a serious gap in the current system.