If a chronic illness or disability requires assistance with daily personal or health needs – dressing, bathing and bathroom use, for instance – the cost can rapidly deplete your savings. The Patient Protection and Affordable Care Act (PPACA), passed by the Democrat majority in the last Congress and signed into law by President Obama, contained a provision to address this problem. Last month, however, unable to find an affordable funding mechanism for the program, the Administration abandoned the proposed remedy.

Known as CLASS, Community Living Assistance Services and Supports, the program was a longstanding priority of the late Senator Ted Kennedy. Although sponsored by the government, it was meant to function as a voluntary insurance plan, open to all working persons regardless of age or health. Under the plan, individuals would pay a monthly premium during their work careers and would be eligible, after five years, for a daily cash benefit of at least $50 for home services or help with nursing home costs, if they became disabled. Expected premiums, however, ranged between $230 and $390 a month.

In order for the plan to work, large numbers of healthy working people would need to sign up for coverage, despite the high premiums. Otherwise, the program might become swamped with disability claims and require a government bailout. Sensing this danger when it enacted the law, Congress required the Department of Health and Human Services (HHS) to certify that the plan would be solvent for 75 years. However, after months of research and planning, HHS Secretary Kathleen Sebelius wrote Congress on October 14, 2011, to say that an adequate funding plan could not be devised.

Proponents of health care reform were disappointed by Sebelius’ announcement and said they would redouble efforts to rescue the program, but critics of PPACA praised the Administration’s decision to abandon the disability plan.

Given the coming election year and the political polarization in Congress, it is unlikely that a solution will be found before the plan’s original 2013 implementation date. For now and the foreseeable future, it appears that a government-sponsored plan to tackle long-term disability assistance is not in the cards.

[Steve Clark]