[House Report 112-342]
[From the U.S. Government Publishing Office]


112th Congress                                            Rept. 112-342
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
       FISCAL RESPONSIBILITY AND RETIREMENT SECURITY ACT OF 2011

                                _______
                                

               December 23, 2011.--Ordered to be printed

                                _______
                                

  Mr. Upton, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1173]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 1173) to repeal the CLASS program, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................    10
Statement of General Performance Goals and Objectives............    10
New Budget Authority, Entitlement Authority, and Tax Expenditures    10
Earmarks.........................................................    10
Committee Cost Estimate..........................................    10
Congressional Budget Office Estimate.............................    10
Federal Mandates Statement.......................................    12
Advisory Committee Statement.....................................    12
Applicability to Legislative Branch..............................    13
Section-by-Section Analysis of the Legislation...................    13
Changes in Existing Law Made by the Bill, as Reported............    13
Dissenting Views.................................................    54

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Fiscal Responsibility and Retirement 
Security Act of 2011''.

SEC. 2. REPEAL OF CLASS PROGRAM.

  (a) Repeal.--Title XXXII of the Public Health Service Act (42 U.S.C. 
300ll et seq.; relating to the CLASS program) is repealed.
  (b) Conforming Changes.--
          (1)(A) Title VIII of the Patient Protection and Affordable 
        Care Act (Public Law 111-148; 124 Stat. 119, 846-847) is 
        repealed.
          (B) The table of contents contained in section 1(b) of such 
        Act is amended by striking the items relating to title VIII.
          (2) Section 1902(a) of the Social Security Act (42 U.S.C. 
        1396a(a)) is amended--
                  (A) by striking paragraphs (81) and (82);
                  (B) in paragraph (80), by inserting ``and'' at the 
                end; and
                  (C) by redesignating paragraph (83) as paragraph 
                (81).
          (3) Section 6021(d) of the Deficit Reduction Act of 2005 (42 
        U.S.C. 1396p note) is amended--
                  (A) in paragraph (2)(A)(iv)--
                          (i) by inserting ``not'' before ``include''; 
                        and
                          (ii) by striking ``and information'' and 
                        inserting ``or information''; and
                  (B) in paragraph (3)--
                          (i) in the heading, by striking 
                        ``Appropriation'' and inserting ``Funding'';
                          (ii) by striking ``2015'' and inserting 
                        ``2012''; and
                          (iii) by adding at the end the following new 
                        sentence: ``There is authorized to be 
                        appropriated to carry out this subsection 
                        $3,000,000 for each of fiscal years 2013 
                        through 2015.''.

                          Purpose and Summary

    H.R. 1173, the ``Fiscal Responsibility and Retirement 
Security Act of 2011,'' a bill to repeal provisions of the 
Public Health Service Act enacted under the Patient Protection 
and Affordable Care Act (PPACA) (entitled the Community Living 
Assistance Services and Supports Act or the CLASS Act), was 
introduced on March 17, 2011, by Rep. Charles W. Boustany, Jr. 
(R-LA), and was referred to the Committees on Energy and 
Commerce and Ways and Means.
    The goal of H.R. 1173 is to terminate any further Federal 
activity or spending by the Executive Branch on the CLASS 
program, which the U.S. Department of Health and Human Services 
(HHS) has determined to be unsustainable.

                  Background and Need for Legislation

    The intent of the CLASS Act was to develop a Federally run 
voluntary insurance program for purchasing community living 
assistance services and supports in order to provide 
individuals with functional limitations with tools that will 
allow them to maintain their personal and financial 
independence.
    However, both before and after passage of PPACA, opponents 
of the program questioned its long-term sustainability and 
raised concerns about the program's affordability for consumers 
and potential impact on the nation's deficit if premiums were 
never actually collected.
    Those longstanding concerns were reiterated on Friday, 
October 14, 2011, when HHS Secretary Kathleen Sebelius 
announced that HHS had suspended work on the CLASS program, 
saying ``despite our best analytical efforts, I do not see a 
viable path forward at this time.'' On the same day, HHS issued 
a comprehensive analysis of its work on the CLASS program 
entitled ``Report on the Actuarial, Marketing, and Legal 
Analyses of the CLASS Program.''
    In that report, Administration on Aging Administrator Kathy 
Greenlee raised concerns with potential adverse selection, 
noting, ``If healthy purchasers are not attracted to the CLASS 
benefit package, then premiums will increase, which will make 
it even more unattractive to purchasers who could also obtain 
policies in the private market. This imbalance in the 
beneficiary pool would cause the program to quickly collapse.''
    The affordability of the program's premiums was also a 
concern. The HHS analysis projected premiums even higher than 
had been previously estimated by outside actuaries, noting the 
basic CLASS benefit plan could cost, ``$235 and $391 a month, 
and may cost as much as $3,000 per month.''

                                Hearings

    The Subcommittee on Health held its first hearing on the 
``Implementation and Sustainability of the New, Government-
Administered CLASS program,'' on March 17, 2011. The following 
witnesses testified at the hearing:
           The Hon. Kathy Greenlee, Assistant 
        Secretary, Administration on Aging;
           Mr. Allen J. Schmitz, FSA, MAAA, Principal, 
        Consulting Actuary, Milliman, American Academy of 
        Actuaries;
           Dr. Joseph Antos, Ph.D., Wilson H. Taylor 
        Scholar in Health Care and Retirement Policy, The 
        American Enterprise Institute;
           The Honorable Mark J. Warshawsky, Current 
        Member of the Social Security Advisory Board, Director 
        of Retirement Research, Towers Watson;
           Anthony (Tony) J. Young, Senior Public 
        Policy Strategist, NISH, The AbilityOne Program; and,
           William Lawrence Minnix, Jr., LeadingAge, 
        CEO, Advance CLASS, Inc, Chair.
    The Subcommittee on Health held another hearing on HHS' 
decision to halt implementation of the CLASS program, on 
October 26, 2011. The following witnesses testified at the 
hearing:
           The Honorable Denny Rehberg, U.S. House of 
        Representatives;
           The Honorable Charles W. Boustany, Jr., 
        M.D., U.S. House of Representatives;
           The Honorable Theodore E. Deutch, U.S. House 
        of Representatives;
           The Honorable Patrick J. Kennedy, Former 
        Congressman, U.S. House of Representatives;
           The Honorable Kathy Greenlee, Assistant 
        Secretary for Aging, Administration on Aging (AOA), 
        U.S. Department of Health and Human Services; and,
           The Honorable Sherry Glied, Ph.D., Assistant 
        Secretary for Planning and Evaluation (ASPE), U.S. 
        Department of Health and Human Services
    The Secretary of HHS also testified before the Health 
Subcommittee at a March 3, 2011 hearing regarding the 
President's FY 2012 Budget and implementation of PPACA, during 
which the CLASS Act was discussed.

                        Committee Consideration

    H.R. 1173 was introduced by Mr. Charles W. Boustany, Jr. on 
March 17, 2011, and was referred to the Committees on Energy 
and Commerce and Ways and Means.
    On November 15, 2011, the Subcommittee on Health met in 
open markup session to consider H.R. 1173 and favorably 
reported the bill to the full Committee by voice vote.
    On November 29 and 30, 2011, the Energy and Commerce 
Committee met in open markup session to consider H.R. 1173. The 
Committee ordered H.R. 1217 favorably reported by a vote of 33 
to 17.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto.


                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the oversight findings and 
recommendations of the Committee are reflected in the 
descriptive portions of this report, including the finding that 
reining in mandatory spending is necessary to avoid a debt 
crisis.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the performance goals and 
objectives of the Committee are reflected in the descriptive 
portions of this report, including the goal of avoiding a debt 
crisis by reining in mandatory spending.

           New Budget Authority, Entitlement Authority, and 
                            Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
1173 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

                                Earmark

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI, 
the Committee finds that H.R. 1173 contains no earmarks, 
limited tax benefits, or limited tariff benefits.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:
                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, December 2, 2011.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1173, the Fiscal 
Responsibility and Retirement Security Act of 2011.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julia 
Mitchell.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 1173--Fiscal Responsibility and Retirement Security Act of 2011

    Summary: H.R. 1173 would repeal title VIII of the Patient 
Protection and Affordable Care Act (PPACA). That title of the 
PPACA established the Community Living Assistance Services and 
Supports (CLASS) Program--a national, voluntary long-term care 
insurance program for purchasing community living assistance 
services and supports. Title VIII also authorized and 
appropriated funding through 2015 for the National 
Clearinghouse for Long-Term Care Information (clearinghouse). 
H.R. 1173 would replace those appropriated funds for the 
clearinghouse for 2013 through 2015 with funding subject to 
future appropriation actions.
    CBO estimates that enacting H.R. 1173 would reduce direct 
spending by $9 million over the 2012-2016 and 2012-2021 
periods. H.R. 1173 also would increase spending subject to 
future appropriation by $9 million over the same periods. Pay-
as-you-go procedures apply because enacting the legislation 
would affect direct spending. Enacting H.R. 1173 would have no 
impact on federal revenues.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1173 is shown in the following table. 
The costs of this legislation fall within budget function 550 
(health).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2012   2013   2014   2015   2016   2017   2018   2019   2020   2021  2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority..................................      0     -3     -3     -3      0      0      0      0      0      0        -9         -9
Estimated Outlays...........................................      0     -3     -3     -3      0      0      0      0      0      0        -9         -9
 
                                                      CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level...............................      0      3      3      3      0      0      0      0      0      0         9          9
Estimated Outlays...........................................      0      3      3      3      0      0      0      0      0      0         9          9
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of estimate: In its March 2011 baseline projections, 
CBO anticipated that the CLASS program would begin collecting 
premiums in fiscal year 2012 and that net receipts of the 
program over the 2012-2021 period would amount to $81 billion, 
not including estimated Medicaid savings of $2 billion. On 
October 14, 2011, the Secretary of the Department of Health and 
Human Services announced that she did not ``see a viable path 
forward for CLASS implementation at this time.''\1\ CBO 
considers that announcement to be definitive new information 
and as a result, in its next baseline projections (which will 
be issued in January), CBO will assume that CLASS will not be 
implemented unless there are changes in law or other actions by 
the Administration that would supersede the Secretary's 
announcement. Further, legislation to repeal the provisions of 
law establishing the CLASS program are now estimated as having 
no budgetary effect relative to current law.
---------------------------------------------------------------------------
    \1\Letter from Kathleen Sebelius, Secretary of the Department of 
Health and Human Services, to John A. Boehner, Speaker, House of 
Representatives, October 14, 2011.
---------------------------------------------------------------------------
    However, the Secretary's announcement does not affect use 
of the funds authorized and appropriated for the clearinghouse. 
Therefore, the replacement of these appropriated funds for the 
clearinghouse for 2013 through 2015 with funding subject to 
future appropriation actions would have a budgetary effect of 
reducing direct spending by $9 million and subsequently 
increasing spending subject to appropriation by $9 million over 
the 2012-2021 period.
    Pay-as-you-go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table. 
Enacting H.R. 1173 would have no impact on federal revenues.

       CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1173, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON ENERGY AND COMMERCE ON NOVEMBER 30, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      By fiscal year, in millions of dollars----
                                                             -------------------------------------------------------------------------------------------
                                                               2012   2013   2014   2015   2016   2017   2018   2019   2020   2021  2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             NET DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact..............................      0     -3     -3     -3      0      0      0      0      0      0        -9         -9
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 1173 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Previous CBO estimate: On October 31, 2011, CBO transmitted 
a letter to Senator John Thune providing a cost estimate for S. 
720, the Repeal the CLASS Entitlement Act, as introduced in the 
Senate on April 4, 2011. H.R. 1173 is similar to S. 720. Both 
bills would have no budgetary effect over the 2012-2021 period 
for provisions repealing the CLASS program. Both bills, 
however, would reduce direct spending by $9 million over the 
2012-2021 period as a result of rescinding appropriated funding 
for the National Clearinghouse for Long-Term Care Information. 
Due to an error on CBO's part, the savings of $9 million over 
the 2012-2021 period attributed to rescinding appropriated 
funding for the clearinghouse were not included in the October 
31 letter to Senator Thune. H.R. 1173 would replace that 
appropriated funding with an authorization for future 
appropriations of similar amounts for the clearinghouse, but S. 
720 would not.
    Estimate prepared by: Federal Costs: Julia Mitchell; Impact 
on State, Local, and Tribal Governments: Lisa Ramirez-Branum; 
Impact on the Private Sector: Michael Levine.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    The bill is entitled the ``Fiscal Responsibility and 
Retirement Security Act of 2011.''

Section II. Repeal of the CLASS program

    Section II repeals Title XXXII of the Public Health Service 
Act and Title VIII of the Patient Protection and Affordable 
Care Act (P.L. 111-148)--provisions related to the CLASS 
program and amends the Deficit Reduction Act of 2005 (P.L. 109-
171) to repeal provisions providing appropriations for the 
National Clearinghouse for Long-Term Care Information through 
FY2015.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

              TITLE XXXII OF THE PUBLIC HEALTH SERVICE ACT


    [TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

[SEC. 3201. PURPOSE.

  [The purpose of this title is to establish a national 
voluntary insurance program for purchasing community living 
assistance services and supports in order to--
          [(1) provide individuals with functional limitations 
        with tools that will allow them to maintain their 
        personal and financial independence and live in the 
        community through a new financing strategy for 
        community living assistance services and supports;
          [(2) establish an infrastructure that will help 
        address the Nation's community living assistance 
        services and supports needs;
          [(3) alleviate burdens on family caregivers; and
          [(4) address institutional bias by providing a 
        financing mechanism that supports personal choice and 
        independence to live in the community.

[SEC. 3202. DEFINITIONS.

  [In this title:
          [(1) Active enrollee.--The term ``active enrollee'' 
        means an individual who is enrolled in the CLASS 
        program in accordance with section 3204 and who has 
        paid any premiums due to maintain such enrollment.
          [(2) Actively employed.--The term ``actively 
        employed'' means an individual who--
                  [(A) is reporting for work at the 
                individual's usual place of employment or at 
                another location to which the individual is 
                required to travel because of the individual's 
                employment (or in the case of an individual who 
                is a member of the uniformed services, is on 
                active duty and is physically able to perform 
                the duties of the individual's position); and
                  [(B) is able to perform all the usual and 
                customary duties of the individual's employment 
                on the individual's regular work schedule.
          [(3) Activities of daily living.--The term 
        ``activities of daily living'' means each of the 
        following activities specified in section 
        7702B(c)(2)(B) of the Internal Revenue Code of 1986:
                  [(A) Eating.
                  [(B) Toileting.
                  [(C) Transferring.
                  [(D) Bathing.
                  [(E) Dressing.
                  [(F) Continence.
          [(4) CLASS program.--The term ``CLASS program'' means 
        the program established under this title.
          [(5) Eligibility assessment system.--The term 
        ``Eligibility Assessment System'' means the entity 
        established by the Secretary under section 3205(a)(2) 
        to make functional eligibility determinations for the 
        CLASS program.
          [(6) Eligible beneficiary.--
                  [(A) In general.--The term ``eligible 
                beneficiary'' means any individual who is an 
                active enrollee in the CLASS program and, as of 
                the date described in subparagraph (B)--
                          [(i) has paid premiums for enrollment 
                        in such program for at least 60 months;
                          [(ii) has earned, with respect to at 
                        least 3 calendar years that occur 
                        during the first 60 months for which 
                        the individual has paid premiums for 
                        enrollment in the program, at least an 
                        amount equal to the amount of wages and 
                        self-employment income which an 
                        individual must have in order to be 
                        credited with a quarter of coverage 
                        under section 213(d) of the Social 
                        Security Act for the year; and
                          [(iii) has paid premiums for 
                        enrollment in such program for at least 
                        24 consecutive months, if a lapse in 
                        premium payments of more than 3 months 
                        has occurred during the period that 
                        begins on the date of the individual's 
                        enrollment and ends on the date of such 
                        determination.
                  [(B) Date described.--For purposes of 
                subparagraph (A), the date described in this 
                subparagraph is the date on which the 
                individual is determined to have a functional 
                limitation described in section 3203(a)(1)(C) 
                that is expected to last for a continuous 
                period of more than 90 days.
                  [(C) Regulations.--The Secretary shall 
                promulgate regulations specifying exceptions to 
                the minimum earnings requirements under 
                subparagraph (A)(ii) for purposes of being 
                considered an eligible beneficiary for certain 
                populations.
          [(7) Hospital; nursing facility; intermediate care 
        facility for the mentally retarded; institution for 
        mental diseases.--The terms ``hospital'', ``nursing 
        facility'', ``intermediate care facility for the 
        mentally retarded'', and ``institution for mental 
        diseases'' have the meanings given such terms for 
        purposes of Medicaid.
          [(8) CLASS independence advisory council.--The term 
        ``CLASS Independence Advisory Council'' or ``Council'' 
        means the Advisory Council established under section 
        3207 to advise the Secretary.
          [(9) CLASS independence benefit plan.--The term 
        ``CLASS Independence Benefit Plan'' means the benefit 
        plan developed and designated by the Secretary in 
        accordance with section 3203.
          [(10) CLASS independence fund.--The term ``CLASS 
        Independence Fund'' or ``Fund'' means the fund 
        established under section 3206.
          [(11) Medicaid.--The term ``Medicaid'' means the 
        program established under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
          [(12) Poverty line.--The term ``poverty line'' has 
        the meaning given that term in section 2110(c)(5) of 
        the Social Security Act (42 U.S.C. 1397jj(c)(5)).
          [(13) Protection and advocacy system.--The term 
        ``Protection and Advocacy System'' means the system for 
        each State established under section 143 of the 
        Developmental Disabilities Assistance and Bill of 
        Rights Act of 2000 (42 U.S.C. 15043).

[SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN.

  [(a) Process for Development.--
          [(1) In general.--The Secretary, in consultation with 
        appropriate actuaries and other experts, shall develop 
        at least 3 actuarially sound benefit plans as 
        alternatives for consideration for designation by the 
        Secretary as the CLASS Independence Benefit Plan under 
        which eligible beneficiaries shall receive benefits 
        under this title. Each of the plan alternatives 
        developed shall be designed to provide eligible 
        beneficiaries with the benefits described in section 
        3205 consistent with the following requirements:
                  [(A) Premiums.--
                          [(i) In general.--Beginning with the 
                        first year of the CLASS program, and 
                        for each year thereafter, subject to 
                        clauses (ii) and (iii), the Secretary 
                        shall establish all premiums to be paid 
                        by enrollees for the year based on an 
                        actuarial analysis of the 75-year costs 
                        of the program that ensures solvency 
                        throughout such 75-year period.
                          [(ii) Nominal premium for poorest 
                        individuals and full-time students.--
                                  [(I) In general.--The monthly 
                                premium for enrollment in the 
                                CLASS program shall not exceed 
                                the applicable dollar amount 
                                per month determined under 
                                subclause (II) for--
                                          [(aa) any individual 
                                        whose income does not 
                                        exceed the poverty 
                                        line; and
                                          [(bb) any individual 
                                        who has not attained 
                                        age 22, and is actively 
                                        employed during any 
                                        period in which the 
                                        individual is a full-
                                        time student (as 
                                        determined by the 
                                        Secretary).
                                  [(II) Applicable dollar 
                                amount.--The applicable dollar 
                                amount described in this 
                                subclause is the amount equal 
                                to $5, increased by the 
                                percentage increase in the 
                                consumer price index for all 
                                urban consumers (U.S. city 
                                average) for each year 
                                occurring after 2009 and before 
                                such year.
                          [(iii) Class independence fund 
                        reserves.--At such time as the CLASS 
                        program has been in operation for 10 
                        years, the Secretary shall establish 
                        all premiums to be paid by enrollees 
                        for the year based on an actuarial 
                        analysis that accumulated reserves in 
                        the CLASS Independence Fund would not 
                        decrease in that year. At such time as 
                        the Secretary determines the CLASS 
                        program demonstrates a sustained 
                        ability to finance expected yearly 
                        expenses with expected yearly premiums 
                        and interest credited to the CLASS 
                        Independence Fund, the Secretary may 
                        decrease the required amount of CLASS 
                        Independence Fund reserves.
                  [(B) Vesting period.--A 5-year vesting period 
                for eligibility for benefits.
                  [(C) Benefit triggers.--A benefit trigger for 
                provision of benefits that requires a 
                determination that an individual has a 
                functional limitation, as certified by a 
                licensed health care practitioner, described in 
                any of the following clauses that is expected 
                to last for a continuous period of more than 90 
                days:
                          [(i) The individual is determined to 
                        be unable to perform at least the 
                        minimum number (which may be 2 or 3) of 
                        activities of daily living as are 
                        required under the plan for the 
                        provision of benefits without 
                        substantial assistance (as defined by 
                        the Secretary) from another individual.
                          [(ii) The individual requires 
                        substantial supervision to protect the 
                        individual from threats to health and 
                        safety due to substantial cognitive 
                        impairment.
                          [(iii) The individual has a level of 
                        functional limitation similar (as 
                        determined under regulations prescribed 
                        by the Secretary) to the level of 
                        functional limitation described in 
                        clause (i) or (ii).
                  [(D) Cash benefit.--Payment of a cash benefit 
                that satisfies the following requirements:
                          [(i) Minimum required amount.--The 
                        benefit amount provides an eligible 
                        beneficiary with not less than an 
                        average of $50 per day (as determined 
                        based on the reasonably expected 
                        distribution of beneficiaries receiving 
                        benefits at various benefit levels).
                          [(ii) Amount scaled to functional 
                        ability.--The benefit amount is varied 
                        based on a scale of functional ability, 
                        with not less than 2, and not more than 
                        6, benefit level amounts.
                          [(iii) Daily or weekly.--The benefit 
                        is paid on a daily or weekly basis.
                          [(iv) No lifetime or aggregate 
                        limit.--The benefit is not subject to 
                        any lifetime or aggregate limit.
          [(2) Review and recommendation by the class 
        independence advisory council.--The CLASS Independence 
        Advisory Council shall--
                  [(A) evaluate the alternative benefit plans 
                developed under paragraph (1); and
                  [(B) recommend for designation as the CLASS 
                Independence Benefit Plan for offering to the 
                public the plan that the Council determines 
                best balances price and benefits to meet 
                enrollees' needs in an actuarially sound 
                manner, while optimizing the probability of the 
                long-term sustainability of the CLASS program.
          [(3) Designation by the secretary.--Not later than 
        October 1, 2012, the Secretary, taking into 
        consideration the recommendation of the CLASS 
        Independence Advisory Council under paragraph (2)(B), 
        shall designate a benefit plan as the CLASS 
        Independence Benefit Plan. The Secretary shall publish 
        such designation, along with details of the plan and 
        the reasons for the selection by the Secretary, in a 
        final rule that allows for a period of public comment.
  [(b) Additional Premium Requirements.--
          [(1) Adjustment of premiums.--
                  [(A) In general.--Except as provided in 
                subparagraphs (B), (C), (D), and (E), the 
                amount of the monthly premium determined for an 
                individual upon such individual's enrollment in 
                the CLASS program shall remain the same for as 
                long as the individual is an active enrollee in 
                the program.
                  [(B) Recalculated premium if required for 
                program solvency.--
                          [(i) In general.--Subject to clause 
                        (ii), if the Secretary determines, 
                        based on the most recent report of the 
                        Board of Trustees of the CLASS 
                        Independence Fund, the advice of the 
                        CLASS Independence Advisory Council, 
                        and the annual report of the Inspector 
                        General of the Department of Health and 
                        Human Services, and waste, fraud, and 
                        abuse, or such other information as the 
                        Secretary determines appropriate, that 
                        the monthly premiums and income to the 
                        CLASS Independence Fund for a year are 
                        projected to be insufficient with 
                        respect to the 20-year period that 
                        begins with that year, the Secretary 
                        shall adjust the monthly premiums for 
                        individuals enrolled in the CLASS 
                        program as necessary (but maintaining a 
                        nominal premium for enrollees whose 
                        income is below the poverty line or who 
                        are full-time students actively 
                        employed).
                          [(ii) Exemption from increase.--Any 
                        increase in a monthly premium imposed 
                        as result of a determination described 
                        in clause (i) shall not apply with 
                        respect to the monthly premium of any 
                        active enrollee who--
                                  [(I) has attained age 65;
                                  [(II) has paid premiums for 
                                enrollment in the program for 
                                at least 20 years; and
                                  [(III) is not actively 
                                employed.
                  [(C) Recalculated premium if reenrollment 
                after more than a 3-month lapse.--
                          [(i) In general.--The reenrollment of 
                        an individual after a 90-day period 
                        during which the individual failed to 
                        pay the monthly premium required to 
                        maintain the individual's enrollment in 
                        the CLASS program shall be treated as 
                        an initial enrollment for purposes of 
                        age-adjusting the premium for 
                        reenrollment in the program.
                          [(ii) Credit for prior months if 
                        reenrolled within 5 years.--An 
                        individual who reenrolls in the CLASS 
                        program after such a 90-day period and 
                        before the end of the 5-year period 
                        that begins with the first month for 
                        which the individual failed to pay the 
                        monthly premium required to maintain 
                        the individual's enrollment in the 
                        program shall be--
                                  [(I) credited with any months 
                                of paid premiums that accrued 
                                prior to the individual's lapse 
                                in enrollment; and
                                  [(II) notwithstanding the 
                                total amount of any such 
                                credited months, required to 
                                satisfy section 3202(6)(A)(ii) 
                                before being eligible to 
                                receive benefits.
                  [(D) No longer status as a full-time 
                student.--An individual subject to a nominal 
                premium on the basis of being described in 
                subsection (a)(1)(A)(ii)(I)(bb) who ceases to 
                be described in that subsection, beginning with 
                the first month following the month in which 
                the individual ceases to be so described, shall 
                be subject to the same monthly premium as the 
                monthly premium that applies to an individual 
                of the same age who first enrolls in the 
                program under the most similar circumstances as 
                the individual (such as the first year of 
                eligibility for enrollment in the program or in 
                a subsequent year).
                  [(E) Penalty for reenollment after 5-year 
                lapse.--In the case of an individual who 
                reenrolls in the CLASS program after the end of 
                the 5-year period described in subparagraph 
                (C)(ii), the monthly premium required for the 
                individual shall be the age-adjusted premium 
                that would be applicable to an initially 
                enrolling individual who is the same age as the 
                reenrolling individual, increased by the 
                greater of--
                          [(i) an amount that the Secretary 
                        determines is actuarially sound for 
                        each month that occurs during the 
                        period that begins with the first month 
                        for which the individual failed to pay 
                        the monthly premium required to 
                        maintain the individual's enrollment in 
                        the CLASS program and ends with the 
                        month preceding the month in which the 
                        reenollment is effective; or
                          [(ii) 1 percent of the applicable 
                        age-adjusted premium for each such 
                        month occurring in such period.
          [(2) Administrative expenses.--In determining the 
        monthly premiums for the CLASS program the Secretary 
        may factor in costs for administering the program, not 
        to exceed for any year in which the program is in 
        effect under this title, an amount equal to 3 percent 
        of all premiums paid during the year.
          [(3) No underwriting requirements.--No underwriting 
        (other than on the basis of age in accordance with 
        subparagraphs (D) and (E) of paragraph (1)) shall be 
        used to--
                  [(A) determine the monthly premium for 
                enrollment in the CLASS program; or
                  [(B) prevent an individual from enrolling in 
                the program.
  [(c) Self-attestation and Verification of Income.--The 
Secretary shall establish procedures to--
          [(1) permit an individual who is eligible for the 
        nominal premium required under subsection (a)(1)(A)(ii) 
        to self-attest that their income does not exceed the 
        poverty line or that their status as a full-time 
        student who is actively employed;
          [(2) verify, using procedures similar to the 
        procedures used by the Commissioner of Social Security 
        under section 1631(e)(1)(B)(ii) of the Social Security 
        Act and consistent with the requirements applicable to 
        the conveyance of data and information under section 
        1942 of such Act, the validity of such self-
        attestation; and
          [(3) require an individual to confirm, on at least an 
        annual basis, that their income does not exceed the 
        poverty line or that they continue to maintain such 
        status.

[SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS.

  [(a) Automatic Enrollment.--
          [(1) In general.--Subject to paragraph (2), the 
        Secretary, in coordination with the Secretary of the 
        Treasury, shall establish procedures under which each 
        individual described in subsection (c) may be 
        automatically enrolled in the CLASS program by an 
        employer of such individual in the same manner as an 
        employer may elect to automatically enroll employees in 
        a plan under section 401(k), 403(b), or 457 of the 
        Internal Revenue Code of 1986.
          [(2) Alternative enrollment procedures.--The 
        procedures established under paragraph (1) shall 
        provide for an alternative enrollment process for an 
        individual described in subsection (c) in the case of 
        such an individual--
                  [(A) who is self-employed;
                  [(B) who has more than 1 employer; or
                  [(C) whose employer does not elect to 
                participate in the automatic enrollment process 
                established by the Secretary.
          [(3) Administration.--
                  [(A) In general.--The Secretary and the 
                Secretary of the Treasury shall, by regulation, 
                establish procedures to ensure that an 
                individual is not automatically enrolled in the 
                CLASS program by more than 1 employer.
                  [(B) Form.--Enrollment in the CLASS program 
                shall be made in such manner as the Secretary 
                may prescribe in order to ensure ease of 
                administration.
  [(b) Election to Opt-Out.--An individual described in 
subsection (c) may elect to waive enrollment in the CLASS 
program at any time in such form and manner as the Secretary 
and the Secretary of the Treasury shall prescribe.
  [(c) Individual Described.--For purposes of enrolling in the 
CLASS program, an individual described in this paragraph is an 
individual--
          [(1) who has attained age 18;
          [(2) who--
                  [(A) receives wages or income on which there 
                is imposed a tax under section 3101(a) or 
                3201(a) of the Internal Revenue Code of 1986; 
                or
                  [(B) derives self-employment income on which 
                there is imposed a tax under section 1401(a) of 
                the Internal Revenue Code of 1986;
          [(3) who is actively employed; and
          [(4) who is not--
                  [(A) a patient in a hospital or nursing 
                facility, an intermediate care facility for the 
                mentally retarded, or an institution for mental 
                diseases and receiving medical assistance under 
                Medicaid; or
                  [(B) confined in a jail, prison, other penal 
                institution or correctional facility, or by 
                court order pursuant to conviction of a 
                criminal offense or in connection with a 
                verdict or finding described in section 
                202(x)(1)(A)(ii) of the Social Security Act (42 
                U.S.C. 402(x)(1)(A)(ii)).
  [(d) Rule of Construction.--Nothing in this title shall be 
construed as requiring an active enrollee to continue to 
satisfy subparagraph (A) or (B) of subsection (c)(2) in order 
to maintain enrollment in the CLASS program.
  [(e) Payment.--
          [(1) Payroll deduction.--An amount equal to the 
        monthly premium for the enrollment in the CLASS program 
        of an individual shall be deducted from the wages or 
        self-employment income of such individual in accordance 
        with such procedures as the Secretary, in coordination 
        with the Secretary of the Treasury, shall establish for 
        employers who elect to deduct and withhold such 
        premiums on behalf of enrolled employees.
          [(2) Alternative payment mechanism.--The Secretary, 
        in coordination with the Secretary of the Treasury, 
        shall establish alternative procedures for the payment 
        of monthly premiums by an individual enrolled in the 
        CLASS program--
                  [(A) who does not have an employer who elects 
                to deduct and withhold premiums in accordance 
                with paragraph (1); or
                  [(B) who does not earn wages or derive self-
                employment income.
  [(f) Transfer of Premiums Collected.--
          [(1) In general.--During each calendar year the 
        Secretary of the Treasury shall deposit into the CLASS 
        Independence Fund a total amount equal, in the 
        aggregate, to 100 percent of the premiums collected 
        during that year.
          [(2) Transfers based on estimates.--The amount 
        deposited pursuant to paragraph (1) shall be 
        transferred in at least monthly payments to the CLASS 
        Independence Fund on the basis of estimates by the 
        Secretary and certified to the Secretary of the 
        Treasury of the amounts collected in accordance with 
        subparagraphs (A) and (B) of paragraph (5). Proper 
        adjustments shall be made in amounts subsequently 
        transferred to the Fund to the extent prior estimates 
        were in excess of, or were less than, actual amounts 
        collected.
  [(g) Other Enrollment and Disenrollment Opportunities.--The 
Secretary, in coordination with the Secretary of the Treasury, 
shall establish procedures under which--
          [(1) an individual who, in the year of the 
        individual's initial eligibility to enroll in the CLASS 
        program, has not enrolled in the program, is eligible 
        to elect to enroll in the program, in such form and 
        manner as the Secretaries shall establish, only during 
        an open enrollment period established by the 
        Secretaries that is specific to the individual and that 
        may not occur more frequently than biennially after the 
        date on which the individual first elected to waive 
        enrollment in the program; and
          [(2) an individual shall only be permitted to 
        disenroll from the program (other than for nonpayment 
        of premiums) during an annual disenrollment period 
        established by the Secretaries and in such form and 
        manner as the Secretaries shall establish.

[SEC. 3205. BENEFITS.

  [(a) Determination of Eligibility.--
          [(1) Application for receipt of benefits.--The 
        Secretary shall establish procedures under which an 
        active enrollee shall apply for receipt of benefits 
        under the CLASS Independence Benefit Plan.
          [(2) Eligibility assessments.--
                  [(A) In general.--Not later than January 1, 
                2012, the Secretary shall--
                          [(i) establish an Eligibility 
                        Assessment System (other than a service 
                        with which the Commissioner of Social 
                        Security has entered into an agreement, 
                        with respect to any State, to make 
                        disability determinations for purposes 
                        of title II or XVI of the Social 
                        Security Act) to provide for 
                        eligibility assessments of active 
                        enrollees who apply for receipt of 
                        benefits;
                          [(ii) enter into an agreement with 
                        the Protection and Advocacy System for 
                        each State to provide advocacy services 
                        in accordance with subsection (d); and
                          [(iii) enter into an agreement with 
                        public and private entities to provide 
                        advice and assistance counseling in 
                        accordance with subsection (e).
                  [(B) Regulations.--The Secretary shall 
                promulgate regulations to develop an expedited 
                nationally equitable eligibility determination 
                process, as certified by a licensed health care 
                practitioner, an appeals process, and a 
                redetermination process, as certified by a 
                licensed health care practitioner, including 
                whether an active enrollee is eligible for a 
                cash benefit under the program and if so, the 
                amount of the cash benefit (in accordance the 
                sliding scale established under the plan).
                  [(C) Presumptive eligibility for certain 
                institutionalized enrollees planning to 
                discharge.--An active enrollee shall be deemed 
                presumptively eligible if the enrollee--
                          [(i) has applied for, and attests is 
                        eligible for, the maximum cash benefit 
                        available under the sliding scale 
                        established under the CLASS 
                        Independence Benefit Plan;
                          [(ii) is a patient in a hospital (but 
                        only if the hospitalization is for 
                        long-term care), nursing facility, 
                        intermediate care facility for the 
                        mentally retarded, or an institution 
                        for mental diseases; and
                          [(iii) is in the process of, or about 
                        to begin the process of, planning to 
                        discharge from the hospital, facility, 
                        or institution, or within 60 days from 
                        the date of discharge from the 
                        hospital, facility, or institution.
                  [(D) Appeals.--The Secretary shall establish 
                procedures under which an applicant for 
                benefits under the CLASS Independence Benefit 
                Plan shall be guaranteed the right to appeal an 
                adverse determination.
  [(b) Benefits.--An eligible beneficiary shall receive the 
following benefits under the CLASS Independence Benefit Plan:
          [(1) Cash benefit.--A cash benefit established by the 
        Secretary in accordance with the requirements of 
        section 3203(a)(1)(D) that--
                  [(A) the first year in which beneficiaries 
                receive the benefits under the plan, is not 
                less than the average dollar amount specified 
                in clause (i) of such section; and
                  [(B) for any subsequent year, is not less 
                than the average per day dollar limit 
                applicable under this subparagraph for the 
                preceding year, increased by the percentage 
                increase in the consumer price index for all 
                urban consumers (U.S. city average) over the 
                previous year.
          [(2) Advocacy services.--Advocacy services in 
        accordance with subsection (d).
          [(3) Advice and assistance counseling.--Advice and 
        assistance counseling in accordance with subsection 
        (e).
          [(4) Administrative expenses.--Advocacy services and 
        advise and assistance counseling services under 
        paragraphs (2) and (3) of this subsection shall be 
        included as administrative expenses under section 
        3203(b)(3).
  [(c) Payment of Benefits.--
          [(1) Life independence account.--
                  [(A) In general.--The Secretary shall 
                establish procedures for administering the 
                provision of benefits to eligible beneficiaries 
                under the CLASS Independence Benefit Plan, 
                including the payment of the cash benefit for 
                the beneficiary into a Life Independence 
                Account established by the Secretary on behalf 
                of each eligible beneficiary.
                  [(B) Use of cash benefits.--Cash benefits 
                paid into a Life Independence Account of an 
                eligible beneficiary shall be used to purchase 
                nonmedical services and supports that the 
                beneficiary needs to maintain his or her 
                independence at home or in another residential 
                setting of their choice in the community, 
                including (but not limited to) home 
                modifications, assistive technology, accessible 
                transportation, homemaker services, respite 
                care, personal assistance services, home care 
                aides, and nursing support. Nothing in the 
                preceding sentence shall prevent an eligible 
                beneficiary from using cash benefits paid into 
                a Life Independence Account for obtaining 
                assistance with decision making concerning 
                medical care, including the right to accept or 
                refuse medical or surgical treatment and the 
                right to formulate advance directives or other 
                written instructions recognized under State 
                law, such as a living will or durable power of 
                attorney for health care, in the case that an 
                injury or illness causes the individual to be 
                unable to make health care decisions.
                  [(C) Electronic management of funds.--The 
                Secretary shall establish procedures for--
                          [(i) crediting an account established 
                        on behalf of a beneficiary with the 
                        beneficiary's cash daily benefit;
                          [(ii) allowing the beneficiary to 
                        access such account through debit 
                        cards; and
                          [(iii) accounting for withdrawals by 
                        the beneficiary from such account.
                  [(D) Primary payor rules for beneficiaries 
                who are enrolled in medicaid.--In the case of 
                an eligible beneficiary who is enrolled in 
                Medicaid, the following payment rules shall 
                apply:
                          [(i) Institutionalized beneficiary.--
                        If the beneficiary is a patient in a 
                        hospital, nursing facility, 
                        intermediate care facility for the 
                        mentally retarded, or an institution 
                        for mental diseases, the beneficiary 
                        shall retain an amount equal to 5 
                        percent of the beneficiary's daily or 
                        weekly cash benefit (as applicable) 
                        (which shall be in addition to the 
                        amount of the beneficiary's personal 
                        needs allowance provided under 
                        Medicaid), and the remainder of such 
                        benefit shall be applied toward the 
                        facility's cost of providing the 
                        beneficiary's care, and Medicaid shall 
                        provide secondary coverage for such 
                        care.
                          [(ii) Beneficiaries receiving home 
                        and community-based services.--
                                  [(I) 50 percent of benefit 
                                retained by beneficiary.--
                                Subject to subclause (II), if a 
                                beneficiary is receiving 
                                medical assistance under 
                                Medicaid for home and community 
                                based services, the beneficiary 
                                shall retain an amount equal to 
                                50 percent of the beneficiary's 
                                daily or weekly cash benefit 
                                (as applicable), and the 
                                remainder of the daily or 
                                weekly cash benefit shall be 
                                applied toward the cost to the 
                                State of providing such 
                                assistance (and shall not be 
                                used to claim Federal matching 
                                funds under Medicaid), and 
                                Medicaid shall provide 
                                secondary coverage for the 
                                remainder of any costs incurred 
                                in providing such assistance.
                                  [(II) Requirement for state 
                                offset.--A State shall be paid 
                                the remainder of a 
                                beneficiary's daily or weekly 
                                cash benefit under subclause 
                                (I) only if the State home and 
                                community-based waiver under 
                                section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) 
                                or subsection (c) or (d) of 
                                section 1915 of such Act (42 
                                U.S.C. 1396n), or the State 
                                plan amendment under subsection 
                                (i) of such section does not 
                                include a waiver of the 
                                requirements of section 
                                1902(a)(1) of the Social 
                                Security Act (relating to 
                                statewideness) or of section 
                                1902(a)(10)(B) of such Act 
                                (relating to comparability) and 
                                the State offers at a minimum 
                                case management services, 
                                personal care services, 
                                habilitation services, and 
                                respite care under such a 
                                waiver or State plan amendment.
                                  [(III) Definition of home and 
                                community-based services.--In 
                                this clause, the term ``home 
                                and community-based services'' 
                                means any services which may be 
                                offered under a home and 
                                community-based waiver 
                                authorized for a State under 
                                section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) 
                                or subsection (c) or (d) of 
                                section 1915 of such Act (42 
                                U.S.C. 1396n) or under a State 
                                plan amendment under subsection 
                                (i) of such section.
                          [(iii) Beneficiaries enrolled in 
                        programs of all-inclusive care for the 
                        elderly (pace).--
                                  [(I) In general.--Subject to 
                                subclause (II), if a 
                                beneficiary is receiving 
                                medical assistance under 
                                Medicaid for PACE program 
                                services under section 1934 of 
                                the Social Security Act (42 
                                U.S.C. 1396u-4), the 
                                beneficiary shall retain an 
                                amount equal to 50 percent of 
                                the beneficiary's daily or 
                                weekly cash benefit (as 
                                applicable), and the remainder 
                                of the daily or weekly cash 
                                benefit shall be applied toward 
                                the cost to the State of 
                                providing such assistance (and 
                                shall not be used to claim 
                                Federal matching funds under 
                                Medicaid), and Medicaid shall 
                                provide secondary coverage for 
                                the remainder of any costs 
                                incurred in providing such 
                                assistance.
                                  [(II) Institutionalized 
                                recipients of pace program 
                                services.--If a beneficiary 
                                receiving assistance under 
                                Medicaid for PACE program 
                                services is a patient in a 
                                hospital, nursing facility, 
                                intermediate care facility for 
                                the mentally retarded, or an 
                                institution for mental 
                                diseases, the beneficiary shall 
                                be treated as in 
                                institutionalized beneficiary 
                                under clause (i).
          [(2) Authorized representatives.--
                  [(A) In general.--The Secretary shall 
                establish procedures to allow access to a 
                beneficiary's cash benefits by an authorized 
                representative of the eligible beneficiary on 
                whose behalf such benefits are paid.
                  [(B) Quality assurance and protection against 
                fraud and abuse.--The procedures established 
                under subparagraph (A) shall ensure that 
                authorized representatives of eligible 
                beneficiaries comply with standards of conduct 
                established by the Secretary, including 
                standards requiring that such representatives 
                provide quality services on behalf of such 
                beneficiaries, do not have conflicts of 
                interest, and do not misuse benefits paid on 
                behalf of such beneficiaries or otherwise 
                engage in fraud or abuse.
          [(3) Commencement of benefits.--Benefits shall be 
        paid to, or on behalf of, an eligible beneficiary 
        beginning with the first month in which an application 
        for such benefits is approved.
          [(4) Rollover option for lump-sum payment.--An 
        eligible beneficiary may elect to--
                  [(A) defer payment of their daily or weekly 
                benefit and to rollover any such deferred 
                benefits from month-to-month, but not from 
                year-to-year; and
                  [(B) receive a lump-sum payment of such 
                deferred benefits in an amount that may not 
                exceed the lesser of--
                          [(i) the total amount of the accrued 
                        deferred benefits; or
                          [(ii) the applicable annual benefit.
          [(5) Period for determination of annual benefits.--
                  [(A) In general.--The applicable period for 
                determining with respect to an eligible 
                beneficiary the applicable annual benefit and 
                the amount of any accrued deferred benefits is 
                the 12-month period that commences with the 
                first month in which the beneficiary began to 
                receive such benefits, and each 12-month period 
                thereafter.
                  [(B) Inclusion of increased benefits.--The 
                Secretary shall establish procedures under 
                which cash benefits paid to an eligible 
                beneficiary that increase or decrease as a 
                result of a change in the functional status of 
                the beneficiary before the end of a 12-month 
                benefit period shall be included in the 
                determination of the applicable annual benefit 
                paid to the eligible beneficiary.
                  [(C) Recoupment of unpaid, accrued 
                benefits.--
                          [(i) In general.--The Secretary, in 
                        coordination with the Secretary of the 
                        Treasury, shall recoup any accrued 
                        benefits in the event of--
                                  [(I) the death of a 
                                beneficiary; or
                                  [(II) the failure of a 
                                beneficiary to elect under 
                                paragraph (4)(B) to receive 
                                such benefits as a lump-sum 
                                payment before the end of the 
                                12-month period in which such 
                                benefits accrued.
                          [(ii) Payment into class independence 
                        fund.--Any benefits recouped in 
                        accordance with clause (i) shall be 
                        paid into the CLASS Independence Fund 
                        and used in accordance with section 
                        3206.
          [(6) Requirement to recertify eligibility for receipt 
        of benefits.--An eligible beneficiary shall 
        periodically, as determined by the Secretary--
                  [(A) recertify by submission of medical 
                evidence the beneficiary's continued 
                eligibility for receipt of benefits; and
                  [(B) submit records of expenditures 
                attributable to the aggregate cash benefit 
                received by the beneficiary during the 
                preceding year.
          [(7) Supplement, not supplant other health care 
        benefits.--Subject to the Medicaid payment rules under 
        paragraph (1)(D), benefits received by an eligible 
        beneficiary shall supplement, but not supplant, other 
        health care benefits for which the beneficiary is 
        eligible under Medicaid or any other Federally funded 
        program that provides health care benefits or 
        assistance.
  [(d) Advocacy Services.--An agreement entered into under 
subsection (a)(2)(A)(ii) shall require the Protection and 
Advocacy System for the State to--
          [(1) assign, as needed, an advocacy counselor to each 
        eligible beneficiary that is covered by such agreement 
        and who shall provide an eligible beneficiary with--
                  [(A) information regarding how to access the 
                appeals process established for the program;
                  [(B) assistance with respect to the annual 
                recertification and notification required under 
                subsection (c)(6); and
                  [(C) such other assistance with obtaining 
                services as the Secretary, by regulation, shall 
                require; and
          [(2) ensure that the System and such counselors 
        comply with the requirements of subsection (h).
  [(e) Advice and Assistance Counseling.--An agreement entered 
into under subsection (a)(2)(A)(iii) shall require the entity 
to assign, as requested by an eligible beneficiary that is 
covered by such agreement, an advice and assistance counselor 
who shall provide an eligible beneficiary with information 
regarding--
          [(1) accessing and coordinating long-term services 
        and supports in the most integrated setting;
          [(2) possible eligibility for other benefits and 
        services;
          [(3) development of a service and support plan;
          [(4) information about programs established under the 
        Assistive Technology Act of 1998 and the services 
        offered under such programs;
          [(5) available assistance with decision making 
        concerning medical care, including the right to accept 
        or refuse medical or surgical treatment and the right 
        to formulate advance directives or other written 
        instructions recognized under State law, such as a 
        living will or durable power of attorney for health 
        care, in the case that an injury or illness causes the 
        individual to be unable to make health care decisions; 
        and
          [(6) such other services as the Secretary, by 
        regulation, may require.
  [(f) No Effect on Eligibility for Other Benefits.--Benefits 
paid to an eligible beneficiary under the CLASS program shall 
be disregarded for purposes of determining or continuing the 
beneficiary's eligibility for receipt of benefits under any 
other Federal, State, or locally funded assistance program, 
including benefits paid under titles II, XVI, XVIII, XIX, or 
XXI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et 
seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under the 
laws administered by the Secretary of Veterans Affairs, under 
low-income housing assistance programs, or under the 
supplemental nutrition assistance program established under the 
Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).
  [(g) Rule of Construction.--Nothing in this title shall be 
construed as prohibiting benefits paid under the CLASS 
Independence Benefit Plan from being used to compensate a 
family caregiver for providing community living assistance 
services and supports to an eligible beneficiary.
  [(h) Protection Against Conflict of Interests.--The Secretary 
shall establish procedures to ensure that the Eligibility 
Assessment System, the Protection and Advocacy System for a 
State, advocacy counselors for eligible beneficiaries, and any 
other entities that provide services to active enrollees and 
eligible beneficiaries under the CLASS program comply with the 
following:
          [(1) If the entity provides counseling or planning 
        services, such services are provided in a manner that 
        fosters the best interests of the active enrollee or 
        beneficiary.
          [(2) The entity has established operating procedures 
        that are designed to avoid or minimize conflicts of 
        interest between the entity and an active enrollee or 
        beneficiary.
          [(3) The entity provides information about all 
        services and options available to the active enrollee 
        or beneficiary, to the best of its knowledge, including 
        services available through other entities or providers.
          [(4) The entity assists the active enrollee or 
        beneficiary to access desired services, regardless of 
        the provider.
          [(5) The entity reports the number of active 
        enrollees and beneficiaries provided with assistance by 
        age, disability, and whether such enrollees and 
        beneficiaries received services from the entity or 
        another entity.
          [(6) If the entity provides counseling or planning 
        services, the entity ensures that an active enrollee or 
        beneficiary is informed of any financial interest that 
        the entity has in a service provider.
          [(7) The entity provides an active enrollee or 
        beneficiary with a list of available service providers 
        that can meet the needs of the active enrollee or 
        beneficiary.

[SEC. 3206. CLASS INDEPENDENCE FUND.

  [(a) Establishment of CLASS Independence Fund.--There is 
established in the Treasury of the United States a trust fund 
to be known as the ``CLASS Independence Fund''. The Secretary 
of the Treasury shall serve as Managing Trustee of such Fund. 
The Fund shall consist of all amounts derived from payments 
into the Fund under sections 3204(f) and 3205(c)(5)(C)(ii), and 
remaining after investment of such amounts under subsection 
(b), including additional amounts derived as income from such 
investments. The amounts held in the Fund are appropriated and 
shall remain available without fiscal year limitation--
          [(1) to be held for investment on behalf of 
        individuals enrolled in the CLASS program;
          [(2) to pay the administrative expenses related to 
        the Fund and to investment under subsection (b); and
          [(3) to pay cash benefits to eligible beneficiaries 
        under the CLASS Independence Benefit Plan.
  [(b) Investment of Fund Balance.--The Secretary of the 
Treasury shall invest and manage the CLASS Independence Fund in 
the same manner, and to the same extent, as the Federal 
Supplementary Medical Insurance Trust Fund may be invested and 
managed under subsections (c), (d), and (e) of section 1841(d) 
of the Social Security Act (42 U.S.C. 1395t).
  [(c) Board of Trustees.--
          [(1) In general.--With respect to the CLASS 
        Independence Fund, there is hereby created a body to be 
        known as the Board of Trustees of the CLASS 
        Independence Fund (hereinafter in this section referred 
        to as the ``Board of Trustees'') composed of the 
        Secretary of the Treasury, the Secretary of Labor, and 
        the Secretary of Health and Human Services, all ex 
        officio, and of two members of the public (both of whom 
        may not be from the same political party), who shall be 
        nominated by the President for a term of 4 years and 
        subject to confirmation by the Senate. A member of the 
        Board of Trustees serving as a member of the public and 
        nominated and confirmed to fill a vacancy occurring 
        during a term shall be nominated and confirmed only for 
        the remainder of such term. An individual nominated and 
        confirmed as a member of the public may serve in such 
        position after the expiration of such member's term 
        until the earlier of the time at which the member's 
        successor takes office or the time at which a report of 
        the Board is first issued under paragraph (2) after the 
        expiration of the member's term. The Secretary of the 
        Treasury shall be the Managing Trustee of the Board of 
        Trustees. The Board of Trustees shall meet not less 
        frequently than once each calendar year. A person 
        serving on the Board of Trustees shall not be 
        considered to be a fiduciary and shall not be 
        personally liable for actions taken in such capacity 
        with respect to the Trust Fund.
          [(2) Duties.--
                  [(A) In general.--It shall be the duty of the 
                Board of Trustees to do the following:
                          [(i) Hold the CLASS Independence 
                        Fund.
                          [(ii) Report to the Congress not 
                        later than the first day of April of 
                        each year on the operation and status 
                        of the CLASS Independence Fund during 
                        the preceding fiscal year and on its 
                        expected operation and status during 
                        the current fiscal year and the next 2 
                        fiscal years.
                          [(iii) Report immediately to the 
                        Congress whenever the Board is of the 
                        opinion that the amount of the CLASS 
                        Independence Fund is not actuarially 
                        sound in regards to the projection 
                        under section 3203(b)(1)(B)(i).
                          [(iv) Review the general policies 
                        followed in managing the CLASS 
                        Independence Fund, and recommend 
                        changes in such policies, including 
                        necessary changes in the provisions of 
                        law which govern the way in which the 
                        CLASS Independence Fund is to be 
                        managed.
                  [(B) Report.--The report provided for in 
                subparagraph (A)(ii) shall--
                          [(i) include--
                                  [(I) a statement of the 
                                assets of, and the 
                                disbursements made from, the 
                                CLASS Independence Fund during 
                                the preceding fiscal year;
                                  [(II) an estimate of the 
                                expected income to, and 
                                disbursements to be made from, 
                                the CLASS Independence Fund 
                                during the current fiscal year 
                                and each of the next 2 fiscal 
                                years;
                                  [(III) a statement of the 
                                actuarial status of the CLASS 
                                Independence Fund for the 
                                current fiscal year, each of 
                                the next 2 fiscal years, and as 
                                projected over the 75-year 
                                period beginning with the 
                                current fiscal year; and
                                  [(IV) an actuarial opinion by 
                                the Chief Actuary of the 
                                Centers for Medicare & Medicaid 
                                Services certifying that the 
                                techniques and methodologies 
                                used are generally accepted 
                                within the actuarial profession 
                                and that the assumptions and 
                                cost estimates used are 
                                reasonable; and
                          [(ii) be printed as a House document 
                        of the session of the Congress to which 
                        the report is made.
                  [(C) Recommendations.--If the Board of 
                Trustees determines that enrollment trends and 
                expected future benefit claims on the CLASS 
                Independence Fund are not actuarially sound in 
                regards to the projection under section 
                3203(b)(1)(B)(i) and are unlikely to be 
                resolved with reasonable premium increases or 
                through other means, the Board of Trustees 
                shall include in the report provided for in 
                subparagraph (A)(ii) recommendations for such 
                legislative action as the Board of Trustees 
                determine to be appropriate, including whether 
                to adjust monthly premiums or impose a 
                temporary moratorium on new enrollments.

[SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL.

  [(a) Establishment.--There is hereby created an Advisory 
Committee to be known as the ``CLASS Independence Advisory 
Council''.
  [(b) Membership.--
          [(1) In general.--The CLASS Independence Advisory 
        Council shall be composed of not more than 15 
        individuals, not otherwise in the employ of the United 
        States--
                  [(A) who shall be appointed by the President 
                without regard to the civil service laws and 
                regulations; and
                  [(B) a majority of whom shall be 
                representatives of individuals who participate 
                or are likely to participate in the CLASS 
                program, and shall include representatives of 
                older and younger workers, individuals with 
                disabilities, family caregivers of individuals 
                who require services and supports to maintain 
                their independence at home or in another 
                residential setting of their choice in the 
                community, individuals with expertise in long-
                term care or disability insurance, actuarial 
                science, economics, and other relevant 
                disciplines, as determined by the Secretary.
          [(2) Terms.--
                  [(A) In general.--The members of the CLASS 
                Independence Advisory Council shall serve 
                overlapping terms of 3 years (unless appointed 
                to fill a vacancy occurring prior to the 
                expiration of a term, in which case the 
                individual shall serve for the remainder of the 
                term).
                  [(B) Limitation.--A member shall not be 
                eligible to serve for more than 2 consecutive 
                terms.
          [(3) Chair.--The President shall, from time to time, 
        appoint one of the members of the CLASS Independence 
        Advisory Council to serve as the Chair.
  [(c) Duties.--The CLASS Independence Advisory Council shall 
advise the Secretary on matters of general policy in the 
administration of the CLASS program established under this 
title and in the formulation of regulations under this title 
including with respect to--
          [(1) the development of the CLASS Independence 
        Benefit Plan under section 3203;
          [(2) the determination of monthly premiums under such 
        plan; and
          [(3) the financial solvency of the program.
  [(d) Application of FACA.--The Federal Advisory Committee Act 
(5 U.S.C. App.), other than section 14 of that Act, shall apply 
to the CLASS Independence Advisory Council.
  [(e) Authorization of Appropriations.--
          [(1) In general.--There are authorized to be 
        appropriated to the CLASS Independence Advisory Council 
        to carry out its duties under this section, such sums 
        as may be necessary for fiscal year 2011 and for each 
        fiscal year thereafter.
          [(2) Availability.--Any sums appropriated under the 
        authorization contained in this section shall remain 
        available, without fiscal year limitation, until 
        expended.

[SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; ANNUAL 
                    REPORT.

  [(a) Solvency.--The Secretary shall regularly consult with 
the Board of Trustees of the CLASS Independence Fund and the 
CLASS Independence Advisory Council, for purposes of ensuring 
that enrollees premiums are adequate to ensure the financial 
solvency of the CLASS program, both with respect to fiscal 
years occurring in the near-term and fiscal years occurring 
over 20- and 75-year periods, taking into account the 
projections required for such periods under subsections 
(a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.
  [(b) No Taxpayer Funds Used To Pay Benefits.--No taxpayer 
funds shall be used for payment of benefits under a CLASS 
Independent Benefit Plan. For purposes of this subsection, the 
term ``taxpayer funds'' means any Federal funds from a source 
other than premiums deposited by CLASS program participants in 
the CLASS Independence Fund and any associated interest 
earnings.
  [(c) Regulations.--The Secretary shall promulgate such 
regulations as are necessary to carry out the CLASS program in 
accordance with this title. Such regulations shall include 
provisions to prevent fraud and abuse under the program.
  [(d) Annual Report.--Beginning January 1, 2014, the Secretary 
shall submit an annual report to Congress on the CLASS program. 
Each report shall include the following:
          [(1) The total number of enrollees in the program.
          [(2) The total number of eligible beneficiaries 
        during the fiscal year.
          [(3) The total amount of cash benefits provided 
        during the fiscal year.
          [(4) A description of instances of fraud or abuse 
        identified during the fiscal year.
          [(5) Recommendations for such administrative or 
        legislative action as the Secretary determines is 
        necessary to improve the program, ensure the solvency 
        of the program, or to prevent the occurrence of fraud 
        or abuse.

[SEC. 3209. INSPECTOR GENERAL'S REPORT.

  [The Inspector General of the Department of Health and Human 
Services shall submit an annual report to the Secretary and 
Congress relating to the overall progress of the CLASS program 
and of the existence of waste, fraud, and abuse in the CLASS 
program. Each such report shall include findings in the 
following areas:
          [(1) The eligibility determination process.
          [(2) The provision of cash benefits.
          [(3) Quality assurance and protection against waste, 
        fraud, and abuse.
          [(4) Recouping of unpaid and accrued benefits.

[SEC. 3210. TAX TREATMENT OF PROGRAM.

  [The CLASS program shall be treated for purposes of the 
Internal Revenue Code of 1986 in the same manner as a qualified 
long-term care insurance contract for qualified long-term care 
services.]
                              ----------                              


               PATIENT PROTECTION AND AFFORDABLE CARE ACT


SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Patient 
Protection and Affordable Care Act''.
  (b) Table of Contents.--The table of contents of this Act is 
as follows:

Sec. 1. Short title; table of contents.
     * * * * * * *

                         [TITLE VIII--CLASS ACT

[Sec. 8001. Short title of title.
[Sec. 8002. Establishment of national voluntary insurance program for 
          purchasing community living assistance services and support.]

           *       *       *       *       *       *       *


                         [TITLE VIII--CLASS ACT

[SEC. 8001. SHORT TITLE OF TITLE.

  [This title may be cited as the ``Community Living Assistance 
Services and Supports Act'' or the ``CLASS Act''.

[SEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE PROGRAM FOR 
                    PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND 
                    SUPPORT.

  [(a) Establishment of CLASS Program.--
          [(1) In general.--The Public Health Service Act (42 
        U.S.C. 201 et seq.), as amended by section 4302(a), is 
        amended by adding at the end the following:

   [``TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

[``SEC. 3201. PURPOSE.

  [The purpose of this title is to establish a national 
voluntary insurance program for purchasing community living 
assistance services and supports in order to--
          [``(1) provide individuals with functional 
        limitations with tools that will allow them to maintain 
        their personal and financial independence and live in 
        the community through a new financing strategy for 
        community living assistance services and supports;
          [``(2) establish an infrastructure that will help 
        address the Nation's community living assistance 
        services and supports needs;
          [``(3) alleviate burdens on family caregivers; and
          [``(4) address institutional bias by providing a 
        financing mechanism that supports personal choice and 
        independence to live in the community.

[``SEC. 3202. DEFINITIONS.

  [In this title:
          [``(1) Active enrollee.--The term `active enrollee' 
        means an individual who is enrolled in the CLASS 
        program in accordance with section 3204 and who has 
        paid any premiums due to maintain such enrollment.
          [``(2) Actively employed.--The term `actively 
        employed' means an individual who--
                  [``(A) is reporting for work at the 
                individual's usual place of employment or at 
                another location to which the individual is 
                required to travel because of the individual's 
                employment (or in the case of an individual who 
                is a member of the uniformed services, is on 
                active duty and is physically able to perform 
                the duties of the individual's position); and
                  [``(B) is able to perform all the usual and 
                customary duties of the individual's employment 
                on the individual's regular work schedule.
          [``(3) Activities of daily living.--The term 
        `activities of daily living' means each of the 
        following activities specified in section 
        7702B(c)(2)(B) of the Internal Revenue Code of 1986:
                  [``(A) Eating.
                  [``(B) Toileting.
                  [``(C) Transferring.
                  [``(D) Bathing.
                  [``(E) Dressing.
                  [``(F) Continence.
          [``(4) CLASS program.--The term `CLASS program' means 
        the program established under this title.
          [``(5) Eligibility assessment system.--The term 
        `Eligibility Assessment System' means the entity 
        established by the Secretary under section 3205(a)(2) 
        to make functional eligibility determinations for the 
        CLASS program.
          [``(6) Eligible beneficiary.--
                  [``(A) In general.--The term `eligible 
                beneficiary' means any individual who is an 
                active enrollee in the CLASS program and, as of 
                the date described in subparagraph (B)--
                          [``(i) has paid premiums for 
                        enrollment in such program for at least 
                        60 months;
                          [``(ii) has earned, with respect to 
                        at least 3 calendar years that occur 
                        during the first 60 months for which 
                        the individual has paid premiums for 
                        enrollment in the program, at least an 
                        amount equal to the amount of wages and 
                        self-employment income which an 
                        individual must have in order to be 
                        credited with a quarter of coverage 
                        under section 213(d) of the Social 
                        Security Act for the year; and
                          [``(iii) has paid premiums for 
                        enrollment in such program for at least 
                        24 consecutive months, if a lapse in 
                        premium payments of more than 3 months 
                        has occurred during the period that 
                        begins on the date of the individual's 
                        enrollment and ends on the date of such 
                        determination.
                  [``(B) Date described.--For purposes of 
                subparagraph (A), the date described in this 
                subparagraph is the date on which the 
                individual is determined to have a functional 
                limitation described in section 3203(a)(1)(C) 
                that is expected to last for a continuous 
                period of more than 90 days.
                  [``(C) Regulations.--The Secretary shall 
                promulgate regulations specifying exceptions to 
                the minimum earnings requirements under 
                subparagraph (A)(ii) for purposes of being 
                considered an eligible beneficiary for certain 
                populations.
          [``(7) Hospital; nursing facility; intermediate care 
        facility for the mentally retarded; institution for 
        mental diseases.--The terms `hospital', `nursing 
        facility', `intermediate care facility for the mentally 
        retarded', and `institution for mental diseases' have 
        the meanings given such terms for purposes of Medicaid.
          [``(8) CLASS independence advisory council.--The term 
        `CLASS Independence Advisory Council' or `Council' 
        means the Advisory Council established under section 
        3207 to advise the Secretary.
          [``(9) CLASS independence benefit plan.--The term 
        `CLASS Independence Benefit Plan' means the benefit 
        plan developed and designated by the Secretary in 
        accordance with section 3203.
          [``(10) CLASS independence fund.--The term `CLASS 
        Independence Fund' or `Fund' means the fund established 
        under section 3206.
          [``(11) Medicaid.--The term `Medicaid' means the 
        program established under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
          [``(12) Poverty line.--The term `poverty line' has 
        the meaning given that term in section 2110(c)(5) of 
        the Social Security Act (42 U.S.C. 1397jj(c)(5)).
          [``(13) Protection and advocacy system.--The term 
        `Protection and Advocacy System' means the system for 
        each State established under section 143 of the 
        Developmental Disabilities Assistance and Bill of 
        Rights Act of 2000 (42 U.S.C. 15043).

[``SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN.

  [``(a) Process for development.--
          [``(1) In general.--The Secretary, in consultation 
        with appropriate actuaries and other experts, shall 
        develop at least 3 actuarially sound benefit plans as 
        alternatives for consideration for designation by the 
        Secretary as the CLASS Independence Benefit Plan under 
        which eligible beneficiaries shall receive benefits 
        under this title. Each of the plan alternatives 
        developed shall be designed to provide eligible 
        beneficiaries with the benefits described in section 
        3205 consistent with the following requirements:
                  [``(A) Premiums.--
                          [``(i) In general.--Beginning with 
                        the first year of the CLASS program, 
                        and for each year thereafter, subject 
                        to clauses (ii) and (iii), the 
                        Secretary shall establish all premiums 
                        to be paid by enrollees for the year 
                        based on an actuarial analysis of the 
                        75-year costs of the program that 
                        ensures solvency throughout such 75-
                        year period.
                          [``(ii) Nominal premium for poorest 
                        individuals and full-time students.--
                                  [``(I) In general.--The 
                                monthly premium for enrollment 
                                in the CLASS program shall not 
                                exceed the applicable dollar 
                                amount per month determined 
                                under subclause (II) for--
                                          [``(aa) any 
                                        individual whose income 
                                        does not exceed the 
                                        poverty line; and
                                          [``(bb) any 
                                        individual who has not 
                                        attained age 22, and is 
                                        actively employed 
                                        during any period in 
                                        which the individual is 
                                        a full-time student (as 
                                        determined by the 
                                        Secretary).
                                  [``(II) Applicable dollar 
                                amount.--The applicable dollar 
                                amount described in this 
                                subclause is the amount equal 
                                to $5, increased by the 
                                percentage increase in the 
                                consumer price index for all 
                                urban consumers (U.S. city 
                                average) for each year 
                                occurring after 2009 and before 
                                such year.
                          [``(iii) Class independence fund 
                        reserves.--At such time as the CLASS 
                        program has been in operation for 10 
                        years, the Secretary shall establish 
                        all premiums to be paid by enrollees 
                        for the year based on an actuarial 
                        analysis that accumulated reserves in 
                        the CLASS Independence Fund would not 
                        decrease in that year. At such time as 
                        the Secretary determines the CLASS 
                        program demonstrates a sustained 
                        ability to finance expected yearly 
                        expenses with expected yearly premiums 
                        and interest credited to the CLASS 
                        Independence Fund, the Secretary may 
                        decrease the required amount of CLASS 
                        Independence Fund reserves.
                  [``(B) Vesting period.--A 5-year vesting 
                period for eligibility for benefits.
                  [``(C) Benefit triggers.--A benefit trigger 
                for provision of benefits that requires a 
                determination that an individual has a 
                functional limitation, as certified by a 
                licensed health care practitioner, described in 
                any of the following clauses that is expected 
                to last for a continuous period of more than 90 
                days:
                          [``(i) The individual is determined 
                        to be unable to perform at least the 
                        minimum number (which may be 2 or 3) of 
                        activities of daily living as are 
                        required under the plan for the 
                        provision of benefits without 
                        substantial assistance (as defined by 
                        the Secretary) from another individual.
                          [``(ii) The individual requires 
                        substantial supervision to protect the 
                        individual from threats to health and 
                        safety due to substantial cognitive 
                        impairment.
                          [``(iii) The individual has a level 
                        of functional limitation similar (as 
                        determined under regulations prescribed 
                        by the Secretary) to the level of 
                        functional limitation described in 
                        clause (i) or (ii).
                  [``(D) Cash benefit.--Payment of a cash 
                benefit that satisfies the following 
                requirements:
                          [``(i) Minimum required amount.--The 
                        benefit amount provides an eligible 
                        beneficiary with not less than an 
                        average of $50 per day (as determined 
                        based on the reasonably expected 
                        distribution of beneficiaries receiving 
                        benefits at various benefit levels).
                          [``(ii) Amount scaled to functional 
                        ability.--The benefit amount is varied 
                        based on a scale of functional ability, 
                        with not less than 2, and not more than 
                        6, benefit level amounts.
                          [``(iii) Daily or weekly.--The 
                        benefit is paid on a daily or weekly 
                        basis.
                          [``(iv) No lifetime or aggregate 
                        limit.--The benefit is not subject to 
                        any lifetime or aggregate limit.
          [``(2) Review and recommendation by the CLASS 
        independence advisory council.--The CLASS Independence 
        Advisory Council shall--
                  [``(A) evaluate the alternative benefit plans 
                developed under paragraph (1); and
                  [``(B) recommend for designation as the CLASS 
                Independence Benefit Plan for offering to the 
                public the plan that the Council determines 
                best balances price and benefits to meet 
                enrollees' needs in an actuarially sound 
                manner, while optimizing the probability of the 
                long-term sustainability of the CLASS program.
          [``(3) Designation by the secretary.--Not later than 
        October 1, 2012, the Secretary, taking into 
        consideration the recommendation of the CLASS 
        Independence Advisory Council under paragraph (2)(B), 
        shall designate a benefit plan as the CLASS 
        Independence Benefit Plan. The Secretary shall publish 
        such designation, along with details of the plan and 
        the reasons for the selection by the Secretary, in a 
        final rule that allows for a period of public comment.
  [``(b) Additional premium requirements.--
          [``(1) Adjustment of premiums.--
                  [``(A) In general.--Except as provided in 
                subparagraphs (B), (C), (D), and (E), the 
                amount of the monthly premium determined for an 
                individual upon such individual's enrollment in 
                the CLASS program shall remain the same for as 
                long as the individual is an active enrollee in 
                the program.
                  [``(B) Recalculated premium if required for 
                program solvency.--
                          [``(i) In general.--Subject to clause 
                        (ii), if the Secretary determines, 
                        based on the most recent report of the 
                        Board of Trustees of the CLASS 
                        Independence Fund, the advice of the 
                        CLASS Independence Advisory Council, 
                        and the annual report of the Inspector 
                        General of the Department of Health and 
                        Human Services, and waste, fraud, and 
                        abuse, or such other information as the 
                        Secretary determines appropriate, that 
                        the monthly premiums and income to the 
                        CLASS Independence Fund for a year are 
                        projected to be insufficient with 
                        respect to the 20-year period that 
                        begins with that year, the Secretary 
                        shall adjust the monthly premiums for 
                        individuals enrolled in the CLASS 
                        program as necessary (but maintaining a 
                        nominal premium for enrollees whose 
                        income is below the poverty line or who 
                        are full-time students actively 
                        employed).
                          [``(ii) Exemption from increase.--Any 
                        increase in a monthly premium imposed 
                        as result of a determination described 
                        in clause (i) shall not apply with 
                        respect to the monthly premium of any 
                        active enrollee who--
                                  [``(I) has attained age 65;
                                  [``(II) has paid premiums for 
                                enrollment in the program for 
                                at least 20 years; and
                                  [``(III) is not actively 
                                employed.
                  [``(C) Recalculated premium if reenrollment 
                after more than a 3-month lapse.--
                          [``(i) In general.--The reenrollment 
                        of an individual after a 90-day period 
                        during which the individual failed to 
                        pay the monthly premium required to 
                        maintain the individual's enrollment in 
                        the CLASS program shall be treated as 
                        an initial enrollment for purposes of 
                        age-adjusting the premium for 
                        reenrollment in the program.
                          [``(ii) Credit for prior months if 
                        reenrolled within 5 years.--An 
                        individual who reenrolls in the CLASS 
                        program after such a 90-day period and 
                        before the end of the 5-year period 
                        that begins with the first month for 
                        which the individual failed to pay the 
                        monthly premium required to maintain 
                        the individual's enrollment in the 
                        program shall be--
                                  [``(I) credited with any 
                                months of paid premiums that 
                                accrued prior to the 
                                individual's lapse in 
                                enrollment; and
                                  [``(II) notwithstanding the 
                                total amount of any such 
                                credited months, required to 
                                satisfy section 3202(6)(A)(ii) 
                                before being eligible to 
                                receive benefits.
                  [``(D) No longer status as a full-time 
                student.--An individual subject to a nominal 
                premium on the basis of being described in 
                subsection (a)(1)(A)(ii)(I)(bb) who ceases to 
                be described in that subsection, beginning with 
                the first month following the month in which 
                the individual ceases to be so described, shall 
                be subject to the same monthly premium as the 
                monthly premium that applies to an individual 
                of the same age who first enrolls in the 
                program under the most similar circumstances as 
                the individual (such as the first year of 
                eligibility for enrollment in the program or in 
                a subsequent year).
                  [``(E) Penalty for reenollment after 5-year 
                lapse.--In the case of an individual who 
                reenrolls in the CLASS program after the end of 
                the 5-year period described in subparagraph 
                (C)(ii), the monthly premium required for the 
                individual shall be the age-adjusted premium 
                that would be applicable to an initially 
                enrolling individual who is the same age as the 
                reenrolling individual, increased by the 
                greater of--
                          [``(i) an amount that the Secretary 
                        determines is actuarially sound for 
                        each month that occurs during the 
                        period that begins with the first month 
                        for which the individual failed to pay 
                        the monthly premium required to 
                        maintain the individual's enrollment in 
                        the CLASS program and ends with the 
                        month preceding the month in which the 
                        reenollment is effective; or
                          [``(ii) 1 percent of the applicable 
                        age-adjusted premium for each such 
                        month occurring in such period.
          [``(2) Administrative expenses.--In determining the 
        monthly premiums for the CLASS program the Secretary 
        may factor in costs for administering the program, not 
        to exceed for any year in which the program is in 
        effect under this title, an amount equal to 3 percent 
        of all premiums paid during the year.
          [``(3) No underwriting requirements.--No underwriting 
        (other than on the basis of age in accordance with 
        subparagraphs (D) and (E) of paragraph (1)) shall be 
        used to--
                  [``(A) determine the monthly premium for 
                enrollment in the CLASS program; or
                  [``(B) prevent an individual from enrolling 
                in the program.
  [``(c) Self-attestation and verification of income.--The 
Secretary shall establish procedures to--
          [``(1) permit an individual who is eligible for the 
        nominal premium required under subsection (a)(1)(A)(ii) 
        to self-attest that their income does not exceed the 
        poverty line or that their status as a full-time 
        student who is actively employed;
          [``(2) verify, using procedures similar to the 
        procedures used by the Commissioner of Social Security 
        under section 1631(e)(1)(B)(ii) of the Social Security 
        Act and consistent with the requirements applicable to 
        the conveyance of data and information under section 
        1942 of such Act, the validity of such self-
        attestation; and
          [``(3) require an individual to confirm, on at least 
        an annual basis, that their income does not exceed the 
        poverty line or that they continue to maintain such 
        status.

[``SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS.

  [``(a) Automatic Enrollment.--
          [``(1) In general.--Subject to paragraph (2), the 
        Secretary, in coordination with the Secretary of the 
        Treasury, shall establish procedures under which each 
        individual described in subsection (c) may be 
        automatically enrolled in the CLASS program by an 
        employer of such individual in the same manner as an 
        employer may elect to automatically enroll employees in 
        a plan under section 401(k), 403(b), or 457 of the 
        Internal Revenue Code of 1986.
          [``(2) Alternative enrollment procedures.--The 
        procedures established under paragraph (1) shall 
        provide for an alternative enrollment process for an 
        individual described in subsection (c) in the case of 
        such an individual--
                  [``(A) who is self-employed;
                  [``(B) who has more than 1 employer; or
                  [``(C) whose employer does not elect to 
                participate in the automatic enrollment process 
                established by the Secretary.
          [``(3) Administration.--
                  [``(A) In general.--The Secretary and the 
                Secretary of the Treasury shall, by regulation, 
                establish procedures to ensure that an 
                individual is not automatically enrolled in the 
                CLASS program by more than 1 employer.
                  [``(B) Form.--Enrollment in the CLASS program 
                shall be made in such manner as the Secretary 
                may prescribe in order to ensure ease of 
                administration.
  [``(b) Election to Opt-Out.--An individual described in 
subsection (c) may elect to waive enrollment in the CLASS 
program at any time in such form and manner as the Secretary 
and the Secretary of the Treasury shall prescribe.
  [``(c) Individual Described.--For purposes of enrolling in 
the CLASS program, an individual described in this paragraph is 
an individual--
          [``(1) who has attained age 18;
          [``(2) who--
                  [``(A) receives wages or income on which 
                there is imposed a tax under section 3101(a) or 
                3201(a) of the Internal Revenue Code of 1986; 
                or
                  [``(B) derives self-employment income on 
                which there is imposed a tax under section 
                1401(a) of the Internal Revenue Code of 1986;
          [``(3) who is actively employed; and
          [``(4) who is not--
                  [``(A) a patient in a hospital or nursing 
                facility, an intermediate care facility for the 
                mentally retarded, or an institution for mental 
                diseases and receiving medical assistance under 
                Medicaid; or
                  [``(B) confined in a jail, prison, other 
                penal institution or correctional facility, or 
                by court order pursuant to conviction of a 
                criminal offense or in connection with a 
                verdict or finding described in section 
                202(x)(1)(A)(ii) of the Social Security Act (42 
                U.S.C. 402(x)(1)(A)(ii)).
  [``(d) Rule of Construction.--Nothing in this title shall be 
construed as requiring an active enrollee to continue to 
satisfy subparagraph (A) or (B) of subsection (c)(2) in order 
to maintain enrollment in the CLASS program.
  [``(e) Payment.--
          [``(1) Payroll deduction.--An amount equal to the 
        monthly premium for the enrollment in the CLASS program 
        of an individual shall be deducted from the wages or 
        self-employment income of such individual in accordance 
        with such procedures as the Secretary, in coordination 
        with the Secretary of the Treasury, shall establish for 
        employers who elect to deduct and withhold such 
        premiums on behalf of enrolled employees.
          [``(2) Alternative payment mechanism.--The Secretary, 
        in coordination with the Secretary of the Treasury, 
        shall establish alternative procedures for the payment 
        of monthly premiums by an individual enrolled in the 
        CLASS program--
                  [``(A) who does not have an employer who 
                elects to deduct and withhold premiums in 
                accordance with paragraph (1); or
                  [``(B) who does not earn wages or derive 
                self-employment income.
  [``(f) Transfer of Premiums Collected.--
          [``(1) In general.--During each calendar year the 
        Secretary of the Treasury shall deposit into the CLASS 
        Independence Fund a total amount equal, in the 
        aggregate, to 100 percent of the premiums collected 
        during that year.
          [``(2) Transfers based on estimates.--The amount 
        deposited pursuant to paragraph (1) shall be 
        transferred in at least monthly payments to the CLASS 
        Independence Fund on the basis of estimates by the 
        Secretary and certified to the Secretary of the 
        Treasury of the amounts collected in accordance with 
        subparagraphs (A) and (B) of paragraph (5). Proper 
        adjustments shall be made in amounts subsequently 
        transferred to the Fund to the extent prior estimates 
        were in excess of, or were less than, actual amounts 
        collected.
  [``(g) Other Enrollment and Disenrollment Opportunities.--The 
Secretary, in coordination with the Secretary of the Treasury, 
shall establish procedures under which--
          [``(1) an individual who, in the year of the 
        individual's initial eligibility to enroll in the CLASS 
        program, has not enrolled in the program, is eligible 
        to elect to enroll in the program, in such form and 
        manner as the Secretaries shall establish, only during 
        an open enrollment period established by the 
        Secretaries that is specific to the individual and that 
        may not occur more frequently than biennially after the 
        date on which the individual first elected to waive 
        enrollment in the program; and
          [``(2) an individual shall only be permitted to 
        disenroll from the program (other than for nonpayment 
        of premiums) during an annual disenrollment period 
        established by the Secretaries and in such form and 
        manner as the Secretaries shall establish.

[``SEC. 3205. BENEFITS.

  [``(a) Determination of Eligibility.--
          [``(1) Application for receipt of benefits.--The 
        Secretary shall establish procedures under which an 
        active enrollee shall apply for receipt of benefits 
        under the CLASS Independence Benefit Plan.
          [``(2) Eligibility assessments.--
                  [``(A) In general.--Not later than January 1, 
                2012, the Secretary shall--
                          [``(i) establish an Eligibility 
                        Assessment System (other than a service 
                        with which the Commissioner of Social 
                        Security has entered into an agreement, 
                        with respect to any State, to make 
                        disability determinations for purposes 
                        of title II or XVI of the Social 
                        Security Act) to provide for 
                        eligibility assessments of active 
                        enrollees who apply for receipt of 
                        benefits;
                          [``(ii) enter into an agreement with 
                        the Protection and Advocacy System for 
                        each State to provide advocacy services 
                        in accordance with subsection (d); and
                          [``(iii) enter into an agreement with 
                        public and private entities to provide 
                        advice and assistance counseling in 
                        accordance with subsection (e).
                  [``(B) Regulations.--The Secretary shall 
                promulgate regulations to develop an expedited 
                nationally equitable eligibility determination 
                process, as certified by a licensed health care 
                practitioner, an appeals process, and a 
                redetermination process, as certified by a 
                licensed health care practitioner, including 
                whether an active enrollee is eligible for a 
                cash benefit under the program and if so, the 
                amount of the cash benefit (in accordance the 
                sliding scale established under the plan).
                  [``(C) Presumptive eligibility for certain 
                institutionalized enrollees planning to 
                discharge.--An active enrollee shall be deemed 
                presumptively eligible if the enrollee--
                          [``(i) has applied for, and attests 
                        is eligible for, the maximum cash 
                        benefit available under the sliding 
                        scale established under the CLASS 
                        Independence Benefit Plan;
                          [``(ii) is a patient in a hospital 
                        (but only if the hospitalization is for 
                        long-term care), nursing facility, 
                        intermediate care facility for the 
                        mentally retarded, or an institution 
                        for mental diseases; and
                          [``(iii) is in the process of, or 
                        about to begin the process of, planning 
                        to discharge from the hospital, 
                        facility, or institution, or within 60 
                        days from the date of discharge from 
                        the hospital, facility, or institution.
                  [``(D) Appeals.--The Secretary shall 
                establish procedures under which an applicant 
                for benefits under the CLASS Independence 
                Benefit Plan shall be guaranteed the right to 
                appeal an adverse determination.
  [``(b) Benefits.--An eligible beneficiary shall receive the 
following benefits under the CLASS Independence Benefit Plan:
          [``(1) Cash benefit.--A cash benefit established by 
        the Secretary in accordance with the requirements of 
        section 3203(a)(1)(D) that--
                  [``(A) the first year in which beneficiaries 
                receive the benefits under the plan, is not 
                less than the average dollar amount specified 
                in clause (i) of such section; and
                  [``(B) for any subsequent year, is not less 
                than the average per day dollar limit 
                applicable under this subparagraph for the 
                preceding year, increased by the percentage 
                increase in the consumer price index for all 
                urban consumers (U.S. city average) over the 
                previous year.
          [``(2) Advocacy services.--Advocacy services in 
        accordance with subsection (d).
          [``(3) Advice and assistance counseling.--Advice and 
        assistance counseling in accordance with subsection 
        (e).
          [``(4) Administrative expenses.--Advocacy services 
        and advise and assistance counseling services under 
        paragraphs (2) and (3) of this subsection shall be 
        included as administrative expenses under section 
        3203(b)(3).
  [``(c) Payment of Benefits.--
          [``(1) Life independence account.--
                  [``(A) In general.--The Secretary shall 
                establish procedures for administering the 
                provision of benefits to eligible beneficiaries 
                under the CLASS Independence Benefit Plan, 
                including the payment of the cash benefit for 
                the beneficiary into a Life Independence 
                Account established by the Secretary on behalf 
                of each eligible beneficiary.
                  [``(B) Use of cash benefits.--Cash benefits 
                paid into a Life Independence Account of an 
                eligible beneficiary shall be used to purchase 
                nonmedical services and supports that the 
                beneficiary needs to maintain his or her 
                independence at home or in another residential 
                setting of their choice in the community, 
                including (but not limited to) home 
                modifications, assistive technology, accessible 
                transportation, homemaker services, respite 
                care, personal assistance services, home care 
                aides, and nursing support. Nothing in the 
                preceding sentence shall prevent an eligible 
                beneficiary from using cash benefits paid into 
                a Life Independence Account for obtaining 
                assistance with decision making concerning 
                medical care, including the right to accept or 
                refuse medical or surgical treatment and the 
                right to formulate advance directives or other 
                written instructions recognized under State 
                law, such as a living will or durable power of 
                attorney for health care, in the case that an 
                injury or illness causes the individual to be 
                unable to make health care decisions.
                  [``(C) Electronic management of funds.--The 
                Secretary shall establish procedures for--
                          [``(i) crediting an account 
                        established on behalf of a beneficiary 
                        with the beneficiary's cash daily 
                        benefit;
                          [``(ii) allowing the beneficiary to 
                        access such account through debit 
                        cards; and
                          [``(iii) accounting for withdrawals 
                        by the beneficiary from such account.
                  [``(D) Primary payor rules for beneficiaries 
                who are enrolled in medicaid.--In the case of 
                an eligible beneficiary who is enrolled in 
                Medicaid, the following payment rules shall 
                apply:
                          [``(i) Institutionalized 
                        beneficiary.--If the beneficiary is a 
                        patient in a hospital, nursing 
                        facility, intermediate care facility 
                        for the mentally retarded, or an 
                        institution for mental diseases, the 
                        beneficiary shall retain an amount 
                        equal to 5 percent of the beneficiary's 
                        daily or weekly cash benefit (as 
                        applicable) (which shall be in addition 
                        to the amount of the beneficiary's 
                        personal needs allowance provided under 
                        Medicaid), and the remainder of such 
                        benefit shall be applied toward the 
                        facility's cost of providing the 
                        beneficiary's care, and Medicaid shall 
                        provide secondary coverage for such 
                        care.
                          [``(ii) Beneficiaries receiving home 
                        and community-based services.--
                                  [``(I) 50 percent of benefit 
                                retained by beneficiary.--
                                Subject to subclause (II), if a 
                                beneficiary is receiving 
                                medical assistance under 
                                Medicaid for home and community 
                                based services, the beneficiary 
                                shall retain an amount equal to 
                                50 percent of the beneficiary's 
                                daily or weekly cash benefit 
                                (as applicable), and the 
                                remainder of the daily or 
                                weekly cash benefit shall be 
                                applied toward the cost to the 
                                State of providing such 
                                assistance (and shall not be 
                                used to claim Federal matching 
                                funds under Medicaid), and 
                                Medicaid shall provide 
                                secondary coverage for the 
                                remainder of any costs incurred 
                                in providing such assistance.
                                  [``(II) Requirement for state 
                                offset.--A State shall be paid 
                                the remainder of a 
                                beneficiary's daily or weekly 
                                cash benefit under subclause 
                                (I) only if the State home and 
                                community-based waiver under 
                                section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) 
                                or subsection (c) or (d) of 
                                section 1915 of such Act (42 
                                U.S.C. 1396n), or the State 
                                plan amendment under subsection 
                                (i) of such section does not 
                                include a waiver of the 
                                requirements of section 
                                1902(a)(1) of the Social 
                                Security Act (relating to 
                                statewideness) or of section 
                                1902(a)(10)(B) of such Act 
                                (relating to comparability) and 
                                the State offers at a minimum 
                                case management services, 
                                personal care services, 
                                habilitation services, and 
                                respite care under such a 
                                waiver or State plan amendment.
                                  [``(III) Definition of home 
                                and community-based services.--
                                In this clause, the term `home 
                                and community-based services' 
                                means any services which may be 
                                offered under a home and 
                                community-based waiver 
                                authorized for a State under 
                                section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) 
                                or subsection (c) or (d) of 
                                section 1915 of such Act (42 
                                U.S.C. 1396n) or under a State 
                                plan amendment under subsection 
                                (i) of such section.
                          [``(iii) Beneficiaries enrolled in 
                        programs of all-inclusive care for the 
                        elderly (pace).--
                                  [``(I) In general.--Subject 
                                to subclause (II), if a 
                                beneficiary is receiving 
                                medical assistance under 
                                Medicaid for PACE program 
                                services under section 1934 of 
                                the Social Security Act (42 
                                U.S.C. 1396u-4), the 
                                beneficiary shall retain an 
                                amount equal to 50 percent of 
                                the beneficiary's daily or 
                                weekly cash benefit (as 
                                applicable), and the remainder 
                                of the daily or weekly cash 
                                benefit shall be applied toward 
                                the cost to the State of 
                                providing such assistance (and 
                                shall not be used to claim 
                                Federal matching funds under 
                                Medicaid), and Medicaid shall 
                                provide secondary coverage for 
                                the remainder of any costs 
                                incurred in providing such 
                                assistance.
                                  [``(II) Institutionalized 
                                recipients of pace program 
                                services.--If a beneficiary 
                                receiving assistance under 
                                Medicaid for PACE program 
                                services is a patient in a 
                                hospital, nursing facility, 
                                intermediate care facility for 
                                the mentally retarded, or an 
                                institution for mental 
                                diseases, the beneficiary shall 
                                be treated as in 
                                institutionalized beneficiary 
                                under clause (i).
          [``(2) Authorized representatives.--
                  [``(A) In general.--The Secretary shall 
                establish procedures to allow access to a 
                beneficiary's cash benefits by an authorized 
                representative of the eligible beneficiary on 
                whose behalf such benefits are paid.
                  [``(B) Quality assurance and protection 
                against fraud and abuse.--The procedures 
                established under subparagraph (A) shall ensure 
                that authorized representatives of eligible 
                beneficiaries comply with standards of conduct 
                established by the Secretary, including 
                standards requiring that such representatives 
                provide quality services on behalf of such 
                beneficiaries, do not have conflicts of 
                interest, and do not misuse benefits paid on 
                behalf of such beneficiaries or otherwise 
                engage in fraud or abuse.
          [``(3) Commencement of benefits.--Benefits shall be 
        paid to, or on behalf of, an eligible beneficiary 
        beginning with the first month in which an application 
        for such benefits is approved.
          [``(4) Rollover option for lump-sum payment.--An 
        eligible beneficiary may elect to--
                  [``(A) defer payment of their daily or weekly 
                benefit and to rollover any such deferred 
                benefits from month-to-month, but not from 
                year-to-year; and
                  [``(B) receive a lump-sum payment of such 
                deferred benefits in an amount that may not 
                exceed the lesser of--
                          [``(i) the total amount of the 
                        accrued deferred benefits; or
                          [``(ii) the applicable annual 
                        benefit.
          [``(5) Period for determination of annual benefits.--
                  [``(A) In general.--The applicable period for 
                determining with respect to an eligible 
                beneficiary the applicable annual benefit and 
                the amount of any accrued deferred benefits is 
                the 12-month period that commences with the 
                first month in which the beneficiary began to 
                receive such benefits, and each 12-month period 
                thereafter.
                  [``(B) Inclusion of increased benefits.--The 
                Secretary shall establish procedures under 
                which cash benefits paid to an eligible 
                beneficiary that increase or decrease as a 
                result of a change in the functional status of 
                the beneficiary before the end of a 12-month 
                benefit period shall be included in the 
                determination of the applicable annual benefit 
                paid to the eligible beneficiary.
                  [``(C) Recoupment of unpaid, accrued 
                benefits.--
                          [``(i) In general.--The Secretary, in 
                        coordination with the Secretary of the 
                        Treasury, shall recoup any accrued 
                        benefits in the event of--
                                  [``(I) the death of a 
                                beneficiary; or
                                  [``(II) the failure of a 
                                beneficiary to elect under 
                                paragraph (4)(B) to receive 
                                such benefits as a lump-sum 
                                payment before the end of the 
                                12-month period in which such 
                                benefits accrued.
                          [``(ii) Payment into class 
                        independence fund.--Any benefits 
                        recouped in accordance with clause (i) 
                        shall be paid into the CLASS 
                        Independence Fund and used in 
                        accordance with section 3206.
          [``(6) Requirement to recertify eligibility for 
        receipt of benefits.--An eligible beneficiary shall 
        periodically, as determined by the Secretary--
                  [``(A) recertify by submission of medical 
                evidence the beneficiary's continued 
                eligibility for receipt of benefits; and
                  [``(B) submit records of expenditures 
                attributable to the aggregate cash benefit 
                received by the beneficiary during the 
                preceding year.
          [``(7) Supplement, not supplant other health care 
        benefits.--Subject to the Medicaid payment rules under 
        paragraph (1)(D), benefits received by an eligible 
        beneficiary shall supplement, but not supplant, other 
        health care benefits for which the beneficiary is 
        eligible under Medicaid or any other Federally funded 
        program that provides health care benefits or 
        assistance.
  [``(d) Advocacy services.--An agreement entered into under 
subsection (a)(2)(A)(ii) shall require the Protection and 
Advocacy System for the State to--
          [``(1) assign, as needed, an advocacy counselor to 
        each eligible beneficiary that is covered by such 
        agreement and who shall provide an eligible beneficiary 
        with--
                  [``(A) information regarding how to access 
                the appeals process established for the 
                program;
                  [``(B) assistance with respect to the annual 
                recertification and notification required under 
                subsection (c)(6); and
                  [``(C) such other assistance with obtaining 
                services as the Secretary, by regulation, shall 
                require; and
          [``(2) ensure that the System and such counselors 
        comply with the requirements of subsection (h).
  [``(e) Advice and Assistance Counseling.--An agreement 
entered into under subsection (a)(2)(A)(iii) shall require the 
entity to assign, as requested by an eligible beneficiary that 
is covered by such agreement, an advice and assistance 
counselor who shall provide an eligible beneficiary with 
information regarding--
          [``(1) accessing and coordinating long-term services 
        and supports in the most integrated setting;
          [``(2) possible eligibility for other benefits and 
        services;
          [``(3) development of a service and support plan;
          [``(4) information about programs established under 
        the Assistive Technology Act of 1998 and the services 
        offered under such programs;
          [``(5) available assistance with decision making 
        concerning medical care, including the right to accept 
        or refuse medical or surgical treatment and the right 
        to formulate advance directives or other written 
        instructions recognized under State law, such as a 
        living will or durable power of attorney for health 
        care, in the case that an injury or illness causes the 
        individual to be unable to make health care decisions; 
        and
          [``(6) such other services as the Secretary, by 
        regulation, may require.
  [``(f) No Effect on Eligibility for Other Benefits.--Benefits 
paid to an eligible beneficiary under the CLASS program shall 
be disregarded for purposes of determining or continuing the 
beneficiary's eligibility for receipt of benefits under any 
other Federal, State, or locally funded assistance program, 
including benefits paid under titles II, XVI, XVIII, XIX, or 
XXI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et 
seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under the 
laws administered by the Secretary of Veterans Affairs, under 
low-income housing assistance programs, or under the 
supplemental nutrition assistance program established under the 
Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).
  [``(g) Rule of Construction.--Nothing in this title shall be 
construed as prohibiting benefits paid under the CLASS 
Independence Benefit Plan from being used to compensate a 
family caregiver for providing community living assistance 
services and supports to an eligible beneficiary.
  [``(h) Protection Against Conflict of Interests.--The 
Secretary shall establish procedures to ensure that the 
Eligibility Assessment System, the Protection and Advocacy 
System for a State, advocacy counselors for eligible 
beneficiaries, and any other entities that provide services to 
active enrollees and eligible beneficiaries under the CLASS 
program comply with the following:
          [``(1) If the entity provides counseling or planning 
        services, such services are provided in a manner that 
        fosters the best interests of the active enrollee or 
        beneficiary.
          [``(2) The entity has established operating 
        procedures that are designed to avoid or minimize 
        conflicts of interest between the entity and an active 
        enrollee or beneficiary.
          [``(3) The entity provides information about all 
        services and options available to the active enrollee 
        or beneficiary, to the best of its knowledge, including 
        services available through other entities or providers.
          [``(4) The entity assists the active enrollee or 
        beneficiary to access desired services, regardless of 
        the provider.
          [``(5) The entity reports the number of active 
        enrollees and beneficiaries provided with assistance by 
        age, disability, and whether such enrollees and 
        beneficiaries received services from the entity or 
        another entity.
          [``(6) If the entity provides counseling or planning 
        services, the entity ensures that an active enrollee or 
        beneficiary is informed of any financial interest that 
        the entity has in a service provider.
          [``(7) The entity provides an active enrollee or 
        beneficiary with a list of available service providers 
        that can meet the needs of the active enrollee or 
        beneficiary.

[``SEC. 3206. CLASS INDEPENDENCE FUND.

  [``(a) Establishment of CLASS Independence Fund.--There is 
established in the Treasury of the United States a trust fund 
to be known as the `CLASS Independence Fund'. The Secretary of 
the Treasury shall serve as Managing Trustee of such Fund. The 
Fund shall consist of all amounts derived from payments into 
the Fund under sections 3204(f) and 3205(c)(5)(C)(ii), and 
remaining after investment of such amounts under subsection 
(b), including additional amounts derived as income from such 
investments. The amounts held in the Fund are appropriated and 
shall remain available without fiscal year limitation--
          [``(1) to be held for investment on behalf of 
        individuals enrolled in the CLASS program;
          [``(2) to pay the administrative expenses related to 
        the Fund and to investment under subsection (b); and
          [``(3) to pay cash benefits to eligible beneficiaries 
        under the CLASS Independence Benefit Plan.
  [``(b) Investment of Fund Balance.--The Secretary of the 
Treasury shall invest and manage the CLASS Independence Fund in 
the same manner, and to the same extent, as the Federal 
Supplementary Medical Insurance Trust Fund may be invested and 
managed under subsections (c), (d), and (e) of section 1841(d) 
of the Social Security Act (42 U.S.C. 1395t).
  [``(c) Board of Trustees.--
          [``(1) In general.--With respect to the CLASS 
        Independence Fund, there is hereby created a body to be 
        known as the Board of Trustees of the CLASS 
        Independence Fund (hereinafter in this section referred 
        to as the `Board of Trustees') composed of the 
        Secretary of the Treasury, the Secretary of Labor, and 
        the Secretary of Health and Human Services, all ex 
        officio, and of two members of the public (both of whom 
        may not be from the same political party), who shall be 
        nominated by the President for a term of 4 years and 
        subject to confirmation by the Senate. A member of the 
        Board of Trustees serving as a member of the public and 
        nominated and confirmed to fill a vacancy occurring 
        during a term shall be nominated and confirmed only for 
        the remainder of such term. An individual nominated and 
        confirmed as a member of the public may serve in such 
        position after the expiration of such member's term 
        until the earlier of the time at which the member's 
        successor takes office or the time at which a report of 
        the Board is first issued under paragraph (2) after the 
        expiration of the member's term. The Secretary of the 
        Treasury shall be the Managing Trustee of the Board of 
        Trustees. The Board of Trustees shall meet not less 
        frequently than once each calendar year. A person 
        serving on the Board of Trustees shall not be 
        considered to be a fiduciary and shall not be 
        personally liable for actions taken in such capacity 
        with respect to the Trust Fund.
          [``(2) Duties.--
                  [``(A) In general.--It shall be the duty of 
                the Board of Trustees to do the following:
                          [``(i) Hold the CLASS Independence 
                        Fund.
                          [``(ii) Report to the Congress not 
                        later than the first day of April of 
                        each year on the operation and status 
                        of the CLASS Independence Fund during 
                        the preceding fiscal year and on its 
                        expected operation and status during 
                        the current fiscal year and the next 2 
                        fiscal years.
                          [``(iii) Report immediately to the 
                        Congress whenever the Board is of the 
                        opinion that the amount of the CLASS 
                        Independence Fund is not actuarially 
                        sound in regards to the projection 
                        under section 3203(b)(1)(B)(i).
                          [``(iv) Review the general policies 
                        followed in managing the CLASS 
                        Independence Fund, and recommend 
                        changes in such policies, including 
                        necessary changes in the provisions of 
                        law which govern the way in which the 
                        CLASS Independence Fund is to be 
                        managed.
                  [``(B) Report.--The report provided for in 
                subparagraph (A)(ii) shall--
                          [``(i) include--
                                  [``(I) a statement of the 
                                assets of, and the 
                                disbursements made from, the 
                                CLASS Independence Fund during 
                                the preceding fiscal year;
                                  [``(II) an estimate of the 
                                expected income to, and 
                                disbursements to be made from, 
                                the CLASS Independence Fund 
                                during the current fiscal year 
                                and each of the next 2 fiscal 
                                years;
                                  [``(III) a statement of the 
                                actuarial status of the CLASS 
                                Independence Fund for the 
                                current fiscal year, each of 
                                the next 2 fiscal years, and as 
                                projected over the 75-year 
                                period beginning with the 
                                current fiscal year; and
                                  [``(IV) an actuarial opinion 
                                by the Chief Actuary of the 
                                Centers for Medicare & Medicaid 
                                Services certifying that the 
                                techniques and methodologies 
                                used are generally accepted 
                                within the actuarial profession 
                                and that the assumptions and 
                                cost estimates used are 
                                reasonable; and
                          [``(ii) be printed as a House 
                        document of the session of the Congress 
                        to which the report is made.
                  [``(C) Recommendations.--If the Board of 
                Trustees determines that enrollment trends and 
                expected future benefit claims on the CLASS 
                Independence Fund are not actuarially sound in 
                regards to the projection under section 
                3203(b)(1)(B)(i) and are unlikely to be 
                resolved with reasonable premium increases or 
                through other means, the Board of Trustees 
                shall include in the report provided for in 
                subparagraph (A)(ii) recommendations for such 
                legislative action as the Board of Trustees 
                determine to be appropriate, including whether 
                to adjust monthly premiums or impose a 
                temporary moratorium on new enrollments.

[``SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL.

  [``(a) Establishment.--There is hereby created an Advisory 
Committee to be known as the `CLASS Independence Advisory 
Council'.
  [``(b) Membership.--
          [``(1) In general.--The CLASS Independence Advisory 
        Council shall be composed of not more than 15 
        individuals, not otherwise in the employ of the United 
        States--
                  [``(A) who shall be appointed by the 
                President without regard to the civil service 
                laws and regulations; and
                  [``(B) a majority of whom shall be 
                representatives of individuals who participate 
                or are likely to participate in the CLASS 
                program, and shall include representatives of 
                older and younger workers, individuals with 
                disabilities, family caregivers of individuals 
                who require services and supports to maintain 
                their independence at home or in another 
                residential setting of their choice in the 
                community, individuals with expertise in long-
                term care or disability insurance, actuarial 
                science, economics, and other relevant 
                disciplines, as determined by the Secretary.
          [``(2) Terms.--
                  [``(A) In general.--The members of the CLASS 
                Independence Advisory Council shall serve 
                overlapping terms of 3 years (unless appointed 
                to fill a vacancy occurring prior to the 
                expiration of a term, in which case the 
                individual shall serve for the remainder of the 
                term).
                  [``(B) Limitation.--A member shall not be 
                eligible to serve for more than 2 consecutive 
                terms.
          [``(3) Chair.--The President shall, from time to 
        time, appoint one of the members of the CLASS 
        Independence Advisory Council to serve as the Chair.
  [``(c) Duties.--The CLASS Independence Advisory Council shall 
advise the Secretary on matters of general policy in the 
administration of the CLASS program established under this 
title and in the formulation of regulations under this title 
including with respect to--
          [``(1) the development of the CLASS Independence 
        Benefit Plan under section 3203;
          [``(2) the determination of monthly premiums under 
        such plan; and
          [``(3) the financial solvency of the program.
  [``(d) Application of FACA.--The Federal Advisory Committee 
Act (5 U.S.C. App.), other than section 14 of that Act, shall 
apply to the CLASS Independence Advisory Council.
  [``(e) Authorization of Appropriations.--
          [``(1) In general.--There are authorized to be 
        appropriated to the CLASS Independence Advisory Council 
        to carry out its duties under this section, such sums 
        as may be necessary for fiscal year 2011 and for each 
        fiscal year thereafter.
          [``(2) Availability.--Any sums appropriated under the 
        authorization contained in this section shall remain 
        available, without fiscal year limitation, until 
        expended.

[``SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; ANNUAL 
                    REPORT.

  [``(a) Solvency.--The Secretary shall regularly consult with 
the Board of Trustees of the CLASS Independence Fund and the 
CLASS Independence Advisory Council, for purposes of ensuring 
that enrollees premiums are adequate to ensure the financial 
solvency of the CLASS program, both with respect to fiscal 
years occurring in the near-term and fiscal years occurring 
over 20- and 75-year periods, taking into account the 
projections required for such periods under subsections 
(a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.
  [``(b) No Taxpayer Funds Used To Pay Benefits.--No taxpayer 
funds shall be used for payment of benefits under a CLASS 
Independent Benefit Plan. For purposes of this subsection, the 
term `taxpayer funds' means any Federal funds from a source 
other than premiums deposited by CLASS program participants in 
the CLASS Independence Fund and any associated interest 
earnings.
  [``(c) Regulations.--The Secretary shall promulgate such 
regulations as are necessary to carry out the CLASS program in 
accordance with this title. Such regulations shall include 
provisions to prevent fraud and abuse under the program.
  [``(d) Annual Report.--Beginning January 1, 2014, the 
Secretary shall submit an annual report to Congress on the 
CLASS program. Each report shall include the following:
          [``(1) The total number of enrollees in the program.
          [``(2) The total number of eligible beneficiaries 
        during the fiscal year.
          [``(3) The total amount of cash benefits provided 
        during the fiscal year.
          [``(4) A description of instances of fraud or abuse 
        identified during the fiscal year.
          [``(5) Recommendations for such administrative or 
        legislative action as the Secretary determines is 
        necessary to improve the program, ensure the solvency 
        of the program, or to prevent the occurrence of fraud 
        or abuse.

[``SEC. 3209. INSPECTOR GENERAL'S REPORT.

  [The Inspector General of the Department of Health and Human 
Services shall submit an annual report to the Secretary and 
Congress relating to the overall progress of the CLASS program 
and of the existence of waste, fraud, and abuse in the CLASS 
program. Each such report shall include findings in the 
following areas:
          [``(1) The eligibility determination process.
          [``(2) The provision of cash benefits.
          [``(3) Quality assurance and protection against 
        waste, fraud, and abuse.
          [``(4) Recouping of unpaid and accrued benefits.

[``SEC. 3210. TAX TREATMENT OF PROGRAM.

  [``The CLASS program shall be treated for purposes of the 
Internal Revenue Code of 1986 in the same manner as a qualified 
long-term care insurance contract for qualified long-term care 
services.''.
          [(2) Conforming amendments to medicaid.--Section 
        1902(a) of the Social Security Act (42 U.S.C. 
        1396a(a)), as amended by section 6505, is amended by 
        inserting after paragraph (80) the following:
          [``(81) provide that the State will comply with such 
        regulations regarding the application of primary and 
        secondary payor rules with respect to individuals who 
        are eligible for medical assistance under this title 
        and are eligible beneficiaries under the CLASS program 
        established under title XXXII of the Public Health 
        Service Act as the Secretary shall establish; and''.
  [(b) Assurance of Adequate Infrastructure for the Provision 
of Personal Care Attendant Workers.--Section 1902(a) of the 
Social Security Act (42 U.S.C. 1396a(a)), as amended by 
subsection (a)(2), is amended by inserting after paragraph (81) 
the following:
          [``(82) provide that, not later than 2 years after 
        the date of enactment of the Community Living 
        Assistance Services and Supports Act, each State 
        shall--
                  [``(A) assess the extent to which entities 
                such as providers of home care, home health 
                services, home and community service providers, 
                public authorities created to provide personal 
                care services to individuals eligible for 
                medical assistance under the State plan, and 
                nonprofit organizations, are serving or have 
                the capacity to serve as fiscal agents for, 
                employers of, and providers of employment-
                related benefits for, personal care attendant 
                workers who provide personal care services to 
                individuals receiving benefits under the CLASS 
                program established under title XXXII of the 
                Public Health Service Act, including in rural 
                and underserved areas;
                  [``(B) designate or create such entities to 
                serve as fiscal agents for, employers of, and 
                providers of employment-related benefits for, 
                such workers to ensure an adequate supply of 
                the workers for individuals receiving benefits 
                under the CLASS program, including in rural and 
                underserved areas; and
                  [``(C) ensure that the designation or 
                creation of such entities will not negatively 
                alter or impede existing programs, models, 
                methods, or administration of service delivery 
                that provide for consumer controlled or self-
                directed home and community services and 
                further ensure that such entities will not 
                impede the ability of individuals to direct and 
                control their home and community services, 
                including the ability to select, manage, 
                dismiss, co-employ, or employ such workers or 
                inhibit such individuals from relying on family 
                members for the provision of personal care 
                services.''.
  [(c) Personal Care Attendants Workforce Advisory Panel.--
          [(1) Establishment.--Not later than 90 days after the 
        date of enactment of this Act, the Secretary of Health 
        and Human Services shall establish a Personal Care 
        Attendants Workforce Advisory Panel for the purpose of 
        examining and advising the Secretary and Congress on 
        workforce issues related to personal care attendant 
        workers, including with respect to the adequacy of the 
        number of such workers, the salaries, wages, and 
        benefits of such workers, and access to the services 
        provided by such workers.
          [(2) Membership.--In appointing members to the 
        Personal Care Attendants Workforce Advisory Panel, the 
        Secretary shall ensure that such members include the 
        following:
                  [(A) Individuals with disabilities of all 
                ages.
                  [(B) Senior individuals.
                  [(C) Representatives of individuals with 
                disabilities.
                  [(D) Representatives of senior individuals.
                  [(E) Representatives of workforce and labor 
                organizations.
                  [(F) Representatives of home and community-
                based service providers.
                  [(G) Representatives of assisted living 
                providers.
  [(d) Inclusion of CLASS Program Information in the National 
Clearinghouse for Long-Term Care Information; Extension of 
Funding.--Section 6021(d) of the Deficit Reduction Act of 2005 
(42 U.S.C. 1396p note) is amended--
          [(1) in paragraph (2)(A)--
                  [(A) in clause (ii), by striking ``and'' at 
                the end;
                  [(B) in clause (iii), by striking the period 
                at the end and inserting ``; and''; and
                  [(C) by adding at the end the following:
                          [``(iv) include information regarding 
                        the CLASS program established under 
                        title XXXII of the Public Health 
                        Service Act and information regarding 
                        how benefits provided under a CLASS 
                        Independence Benefit Plan differ from 
                        disability insurance benefits.''; and
          [(2) in paragraph (3), by striking ``2010'' and 
        inserting ``2015''.
  [(e) Effective Date.--The amendments made by subsections (a), 
(b), and (d) take effect on January 1, 2011.
  [(f) Rule of Construction.--Nothing in this title or the 
amendments made by this title are intended to replace or 
displace public or private disability insurance benefits, 
including such benefits that are for income replacement.]

           *       *       *       *       *       *       *

                              ----------                              


                          SOCIAL SECURITY ACT



           *       *       *       *       *       *       *
TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS

           *       *       *       *       *       *       *


                   STATE PLANS FOR MEDICAL ASSISTANCE

  Sec. 1902. (a) A State plan for medical assistance must--
          (1) * * *

           *       *       *       *       *       *       *

          (80) provide that the State shall not provide any 
        payments for items or services provided under the State 
        plan or under a waiver to any financial institution or 
        entity located outside of the United States; and
          [(81) provide that the State will comply with such 
        regulations regarding the application of primary and 
        secondary payor rules with respect to individuals who 
        are eligible for medical assistance under this title 
        and are eligible beneficiaries under the CLASS program 
        established under title XXXII of the Public Health 
        Service Act as the Secretary shall establish;
          [(82) provide that, not later than 2 years after the 
        date of enactment of the Community Living Assistance 
        Services and Supports Act, each State shall--
                  [(A) assess the extent to which entities such 
                as providers of home care, home health 
                services, home and community service providers, 
                public authorities created to provide personal 
                care services to individuals eligible for 
                medical assistance under the State plan, and 
                nonprofit organizations, are serving or have 
                the capacity to serve as fiscal agents for, 
                employers of, and providers of employment-
                related benefits for, personal care attendant 
                workers who provide personal care services to 
                individuals receiving benefits under the CLASS 
                program established under title XXXII of the 
                Public Health Service Act, including in rural 
                and underserved areas;
                  [(B) designate or create such entities to 
                serve as fiscal agents for, employers of, and 
                providers of employment-related benefits for, 
                such workers to ensure an adequate supply of 
                the workers for individuals receiving benefits 
                under the CLASS program, including in rural and 
                underserved areas; and
                  [(C) ensure that the designation or creation 
                of such entities will not negatively alter or 
                impede existing programs, models, methods, or 
                administration of service delivery that provide 
                for consumer controlled or self-directed home 
                and community services and further ensure that 
                such entities will not impede the ability of 
                individuals to direct and control their home 
                and community services, including the ability 
                to select, manage, dismiss, co-employ, or 
                employ such workers or inhibit such individuals 
                from relying on family members for the 
                provision of personal care services; and]
          [(83)] (81) provide for implementation of the payment 
        models specified by the Secretary under section 
        1115A(c) for implementation on a nationwide basis 
        unless the State demonstrates to the satisfaction of 
        the Secretary that implementation would not be 
        administratively feasible or appropriate to the health 
        care delivery system of the State.

           *       *       *       *       *       *       *

                              ----------                              


                     DEFICIT REDUCTION ACT OF 2005



           *       *       *       *       *       *       *
                      TITLE VI--MEDICAID AND SCHIP

Subtitle A--Medicaid

           *       *       *       *       *       *       *


CHAPTER 2--LONG-TERM CARE UNDER MEDICAID

           *       *       *       *       *       *       *


           Subchapter B--Expanded Access to Certain Benefits

SEC. 6021. EXPANSION OF STATE LONG-TERM CARE PARTNERSHIP PROGRAM.

  (a) * * *

           *       *       *       *       *       *       *

  (d) National Clearinghouse for Long-Term Care Information.--
          (1) * * *
          (2) Duties.--
                  (A) In general.--The National Clearinghouse 
                for Long-Term Care Information shall--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iv) not include information 
                        regarding the CLASS program established 
                        under title XXXII of the Public Health 
                        Service Act [and] or information 
                        regarding how benefits provided under a 
                        CLASS Independence Benefit Plan differ 
                        from disability insurance benefits.

           *       *       *       *       *       *       *

          (3) [Appropriation] Funding.--Out of any funds in the 
        Treasury not otherwise appropriated, there is 
        appropriated to carry out this subsection, $3,000,000 
        for each of fiscal years 2006 through [2015] 2012. 
        There is authorized to be appropriated to carry out 
        this subsection $3,000,000 for each of fiscal years 
        2013 through 2015.

           *       *       *       *       *       *       *


                            DISSENTING VIEWS

    We, the undersigned members of the Committee on Energy and 
Commerce, oppose the passage of H.R. 1173, the Fiscal 
Responsibility and Retirement Security Act of 2011, a bill to 
repeal Title XXXII of the Public Health Service Act (relating 
to the Community Living Assistance Services and Supports 
Program, generally known as the CLASS Program) as well as other 
provisions included in Title VIII of the Affordable Care Act 
(relating to the National Clearinghouse for Long-Term Care 
Information and the Personal Care Attendants Workforce Advisory 
Panel). Accordingly, we submit the following comments to 
express our concerns about this ill-conceived and ill-advised 
legislation.

                              Introduction

    Committee Democrats and Republicans alike agree: The United 
States is facing a long-term care crisis that demands our 
immediate and full attention\1\--a crisis that will only grow 
worse as the nation's baby boomers begin to age.\2\
---------------------------------------------------------------------------
    \1\See the comments of various Committee members during the 
hearings and markups on CLASS and H.R. 1173 in which they recognize the 
enormity of the U.S. long-term care problem:
    From the July 2009 full Committee markup on H.R. 3200, America's 
Affordable Health Choices Act of 2009 (the House of Representatives' 
precursor legislation to the Affordable Care Act) (House Committee on 
Energy and Commerce, Markup on H.R. 3200, America's Affordable Health 
Choices Act of 2009, 111th Cong. (July 17 and 20, 2009) (transcript of 
the proceeding)):
     L``[T]his is [a] major issue. . . .'' (Rep. Frank Pallone, 
p. 17) (July 17, 2009)
     LIt [long-term care] is definitely something we need to 
do.'' (Rep. Joe Barton, p. 269) (July 20, 2009)
    From the March 2011 Health Subcommittee hearing on the 
implementation of CLASS (Subcommittee on Health, House Committee on 
Energy and Commerce, Hearing on the Implementation and Sustainability 
of the New Government-Administered Community Living Assistance Services 
and Supports (CLASS) Program, 112th Cong. (Mar. 17, 2011) (transcript 
of the proceeding)):
     L``[W]e can all agree that do have a serious long-term 
care problem in this country. . . .'' (Rep. Joe Pitts, p. 4)
    L ``We all know the problem exists.'' (Rep. Michael 
Burgess, p. 6)
    L ``The [long-term care] problem has been with us for a 
long time, and it is growing.'' (Rep. Henry Waxman, p. 20)
     L``[W]hat is the best thing for us . . . to serve a 
terrifying unmet need for all of our people.'' (Rep. John Dingell, p. 
23)
    From the October 2011 joint Oversight and Investigations 
Subcommittee and Health Subcommittee hearing on the financial 
sustainability of CLASS (Subcommittee on Oversight and Investigations 
and Subcommittee on Health, House Committee on Energy and Commerce, 
Joint Hearing on Class Cancelled: An Unsustainable Program and Its 
Consequences for the Nation's Deficit, 112th Cong. (Oct. 26, 2011) 
(transcript of the proceeding)):
     L``[W]e have got to keep looking for solutions to the 
long-term problem, and we have got to do it in a bi-partisan way.'' 
(Rep. Diana DeGette, p. 15)
     L``Really the question . . . everybody agrees we need to 
come up with a solution for the problem of long-term care. I don't 
think any of us argue that.'' (Rep. Bill Cassidy, p. 122)
    From the November 2011 Health Subcommittee markup on H.R. 1173 
(Subcommittee on Health, House Committee on Energy and Commerce, Markup 
on H.R. 1173, the Fiscal Responsibility and Retirement Security Act of 
2011, 112th Cong. (Nov. 15, 2011) (transcript of the proceeding):
     L``[L]ong-term care reform, [is] an issue that is 
important to all of us as we hear from constituents regularly about the 
growing cost of long-term care services.'' (Rep. Fred Upton, pp. 19-20)
     L``[T]he issue of long-term care as a critical hole in our 
health care system is agreed upon by both sides of this committee. 
(Rep. Lois Capps, p. 26)
    From the November 2011 full Committee markup on H.R. 1173 (House 
Committee on Energy and Commerce, Markup on H.R. 1173, the Fiscal 
Responsibility and Retirement Security Act of 2011, 112th Cong. (Nov. 
30, 2011) (transcript of the proceeding):
     L``I was impressed by the level of bipartisan support for 
finding an affordable and sustainable solution to this [long-term care] 
problem.'' (Rep. Ed Towns, p. 223)
     L``[Y]ou [Committee Democrats] are right. There is a huge 
need to address long-term care.'' (Rep. John Shimkus, p. 226)
    \2\United States Census Bureau, The Older Population in the United 
States: 2010 to 2050 (May 2010) (online at http://www.census.gov/prod/
2010pubs/p25-1138.pdf).
---------------------------------------------------------------------------
    In response to this concern, Congress established the 
Community Living Assistance Services and Supports Program--or 
CLASS--as part of the Affordable Care Act (ACA)\3\ in 2010. 
CLASS represents the federal government's first and to date, 
only major--albeit limited--attempt to begin to address our 
pressing long-term care problem. Its purpose is clear: To 
provide a national, voluntary, and self-sustaining insurance 
program for the purchase of assistance services and supports to 
aid functionally impaired elderly and disabled people. Its 
goal--to allow these individuals to live independently at home 
and in the community for as long as possible without 
impoverishing themselves--is warmly embraced by both 
parties.\4\ Nonetheless, the Program's implementation has been 
anything but straightforward or uniformly supported; indeed, we 
readily acknowledge that CLASS has not yet been formerly 
launched and is now wholly opposed by our Republicans 
colleagues.\5\
---------------------------------------------------------------------------
    \3\The ACA is comprised of two public laws, P.L. 111-148 and P.L. 
111-152.
    \4\See, e.g., remarks of Rep. Joe Pitts (House Committee on Energy 
and Commerce, Markup on H.R. 1173, the Fiscal Responsibility and 
Retirement Security Act of 2011, 112th Cong., p. 24 (Nov. 29, 2011) 
(transcript of the proceeding)); Rep. Henry Waxman (Subcommittee on 
Health, House Committee on Energy and Commerce, Markup on H.R. 1173, 
the Fiscal Responsibility and Retirement Security Act of 2011, 112th 
Cong., p. 15 (Nov. 15, 2011) (transcript of the proceeding)); Rep. 
Frank Pallone (Subcommittee on Health, House Committee on Energy and 
Commerce, Hearing on the Implementation and Sustainability of the New 
Government-Administered Community Living Assistance Services and 
Supports (CLASS) Program, 112th Cong., p. 9 (Mar. 17, 2011) (transcript 
of the proceeding)); Rep. Phil Gingrey (Subcommittee on Health, House 
Committee on Energy and Commerce, Hearing on the Implementation and 
Sustainability of the New Government-Administered Community Living 
Assistance Services and Supports (CLASS) Program, 112th Cong., p. 16; 
(Mar. 17, 2011) (transcript of the proceeding)); and Rep. Lee Terry 
(House Committee on Energy and Commerce, Markup on H.R. 3200, America's 
Affordable Health Choices Act of 2009, 111th Cong., p. 290 (July 20, 
2009) (transcript of the proceeding)).
    \5\CLASS was adopted--on a bipartisan voice vote--as an amendment 
to H.R. 3200, America's Affordable Health Choices Act of 2009, during 
the Committee's mark up of that legislation. H.R. 3200 was the House of 
Representatives' precursor legislation to the ACA (House Committee on 
Energy and Commerce, Markup on H.R. 3200, America's Affordable Health 
Choices Act of 2009, 111th Cong., p. 293 (July 20, 2009) (transcript of 
the proceeding)). Now, however, Republicans are united in their 
opposition to the Program (House Committee on Energy and Commerce, 
Markup on H.R. 1173, the Fiscal Responsibility and Retirement Security 
Act of 2011, 112th Cong., pp. 259-266 (Nov. 30, 2011) (transcript of 
the proceeding)).
---------------------------------------------------------------------------
    In its October 2011 report, A Report on the Actuarial, 
Marketing, and Legal Analyses of the CLASS Program, the 
Department of Health and Human Services (HHS) lays out the 
various reasons behind its decision not to move forward with 
the implementation of CLASS at this time.\6\ While 
disappointing, in light of the issues raised, we believe the 
Department has acted responsibly. But neither HHS\7\ nor we 
believe that the appropriate response to the Report is a 
wholesale dismantling of CLASS. Most importantly, despite the 
setbacks, the people for whom CLASS was enacted do not think 
this is the right approach either.\8\ Yet, this is precisely 
what H.R. 1173 sets out to do--rather than take on the 
Program's flaws identified in the Report, the bill would repeal 
CLASS altogether. At the same time and consistent with the 
Republican mantra ``just say no'' to all ACA-related programs, 
the legislation fails to put forward an alternative solution to 
the very problem its supporters claim they want to fix.
---------------------------------------------------------------------------
    \6\Department of Health and Human Services, A Report on the 
Actuarial, Marketing, and Legal Analyses of the CLASS Program (Oct. 
2011) (online at http://aspe.hhs.gov/daltcp/reports/2011/class/
index.shtml).
    \7\``We [HHS] feel that repealing CLASS would serve no useful 
purpose at this point.'' (Testimony of Kathy Greenlee, HHS Assistant 
Secretary for Aging, Subcommittee on Oversight and Investigations and 
Subcommittee on Health, House Committee on Energy and Commerce, Joint 
Hearing on Class Cancelled: An Unsustainable Program and Its 
Consequences for the Nation's Deficit, 112th Cong., p. 102 (Oct. 26, 
2011) (transcript of the proceeding)).
    \8\Letter from 56 organizations in opposition to H.R. 1173 to Reps. 
Fred Upton, Chair, Committee on Energy and Commerce; Rep. Henry Waxman, 
Ranking Member, Committee on Energy and Commerce; Rep. Joe Pitts, 
Chair, Subcommittee on Health, Committee on Energy and Commerce; and 
Rep. Frank Pallone, Ranking Member, Subcommittee on Health, Committee 
on Energy and Commerce (Nov. 14, 2011).
---------------------------------------------------------------------------
    In our view, H.R. 1173 is precisely the wrong way to go. 
While a ``timeout'' for CLASS may be fitting at this juncture 
in the Program's brief history, ``throwing in the towel'' 
completely simply is not the answer. HHS and Congress should 
instead learn from experts about how best to make CLASS work 
and then take the necessary steps to ensure that happens. And 
until then, CLASS should remain on the law books. For these 
reasons and more, we join in opposing H.R. 1173.

                    Background and Origins of CLASS

    The nation's long-term care crisis has been present and 
fully recognized for some time now. Numerous blue ribbon panels 
have been assembled and dozens of reports have been written--
all calling for a national response to the problem.\9\
---------------------------------------------------------------------------
    \9\See, e.g., National Council on Disability, The State of 21st 
Century Long-Term Services and Supports: Financing and Systems Reform 
for Americans with Disabilities (Dec. 2005) (online at www.ncd.gov); 
and The Pepper Commission, U.S. Commission on Comprehensive Health 
Care, A Call for Action: Final Report (U.S. Government Printing Office 
(Sep. 1990).
---------------------------------------------------------------------------
    Until the enactment of CLASS, Congress failed to meet this 
challenge. Without it--or some other similar program in place--
our long-term crisis will only be exacerbated. The numbers and 
statistics speak for themselves:
     Currently, there are over 10 million Americans who 
need long-term care, and this number is expected to grow to 15 
million by 2020.\10\ Sixty percent of these individuals are 
aged 65 or older, and 40% are aged 18-64.\11\
---------------------------------------------------------------------------
    \10\U.S. Department of Health and Human Services, Remarks as 
Prepared for Delivery by Secretary Kathleen Sebelius at the Kaiser 
Family Foundation (Feb. 7, 2011) (online at http://www.hhs.gov/
secretary/about/speeches/sp20110207.html).
    \11\National Clearinghouse for Long-Term Care, What is Long-Term 
Care? (online at http://www.longtermcare.gov/LTC/Main_Site/index.aspx) 
(accessed Oct. 24, 2011).
---------------------------------------------------------------------------
     People who reach age 65 have a 40% chance of 
entering a nursing home.\12\
---------------------------------------------------------------------------
    \12\Ibid.
---------------------------------------------------------------------------
     Today, some 1.7 million people reside in nursing 
homes; another 520,000 live in assisted living facilities or 
institutions.\13\
---------------------------------------------------------------------------
    \13\Alliance for Health Reform, Covering Health Issues, 5th Edition 
(online at http://www.allhealth.org/sourcebookcontent.asp?CHID=72) 
(accessed Oct. 24, 2011).
---------------------------------------------------------------------------
     More than two-thirds of individuals who reach the 
age of 65 will require long-term services and supports at some 
point before they die.\14\
---------------------------------------------------------------------------
    \14\Congressional Research Service, Community Living Assistance 
Services and Supports (CLASS) Provisions in the Patient Protection and 
Affordable Care Act (ACA), p. 2 (Nov. 14, 2011) (R40842).
---------------------------------------------------------------------------
     The vast majority of Americans in need of long-
term care remain at home. An estimated 52 million unpaid 
caregivers bear the burden of providing this care. Their role 
is crucial in keeping their loved ones out of nursing homes and 
hospitals and at home with their families and friends.\15\
---------------------------------------------------------------------------
    \15\AARP Public Policy Institute, Valuing the Invaluable: The 
Economic Value of Family Caregiving (2008) (online at http://
assets.aarp.org/rgcenter/il/i13_caregiving.pdf).
---------------------------------------------------------------------------
    But population data alone do not make the case for the need 
to address the country's long-term care concerns. The costs 
associated with long-term care services are exorbitantly high 
and also continue to grow. For example, in 2011, the annual 
cost of a nursing home stay was some $70,000, and the average 
cost of personal unskilled home health services was $19 an 
hour.\16\
---------------------------------------------------------------------------
    \16\Congressional Research Service, Community Living Assistance 
Services and Supports (CLASS) Provisions in the Patient Protection and 
Affordable Care Act (ACA), pp. 2-3 (Nov. 14, 2011) (R40842).
---------------------------------------------------------------------------
    Although much of the public believes otherwise,\17\ 
Medicaid is the primary payer for long-term care in the United 
States.\18\ Nationwide, Medicaid accounts for at least 40% of 
all long-term care spending.\19\ In FY 2010, state and federal 
dollars for long-term care services within Medicaid totaled 
approximately $120 billion.\20\ And by 2027, when the baby 
boomers have aged into retirement, state Medicaid long-term 
care expenditures alone are projected to reach $115 billion 
annually.\21\ Clearly, as many members commented during the 
hearings and mark-ups on H.R. 1173, we cannot continue to rely 
on Medicaid as the primary source for financing these 
services.\22\
---------------------------------------------------------------------------
    \17\Most Americans--especially middle-aged and senior individuals--
believe that Medicare provides extensive coverage for long-term care 
services. (AARP, Planning for Long-Term Care: A Survey of Midlife and 
Older Women (Oct. 2010) (online at http://assets.aarp.org/rgcenter/
general/ltc-planning-women.pdf); and AARP, The Costs of Long-Term Care: 
Public Perceptions Versus Reality in 2006 (Dec. 2006) (online at http:/
/assets.aarp.org/rgcenter/health/ltc_ costs_2006.pdf)). This is not 
correct: Medicare offers only short-term skilled nursing home care and 
limited home health services. (Congressional Research Service, 
Community Living Assistance Services and Supports (CLASS) Provisions in 
the Patient Protection and Affordable Care Act (ACA), p. 3, (Nov. 14, 
2011) (R40842)).
    \18\Kaiser Family Foundation, The Community Living Assistance 
Services and Supports (CLASS) Act (Oct. 2009) (online at http://
www.kff.org/healthreform/upload/7996.pdf).
    \19\Kaiser Family Foundation, Medicaid and Long-Term Care Services 
and Supports (Mar. 2011) (online at http://www.kff.org/medicaid/upload/
2186-08.pdf).
    \20\The Congressional Budget Office, March 2011 Baseline: Medicaid 
(online at http://www.cbo.gov/budget/factsheets/2011b/medicaid.pdf).
    \21\America's Health Insurance Plans, State Medicaid Expenditures 
for Long-Term Care 2008-2027 (Sept. 2008) (online at http://
www.ahip.org/content/default.aspx?docid=24597).
    \22\See, e.g., remarks of Rep. Frank Pallone (House Committee on 
Energy and Commerce, Markup on H.R. 1173, the Fiscal Responsibility and 
Retirement Security Act of 2011, 112th Cong., p. 209 (Nov. 30, 2011) 
(transcript of the proceeding)); Rep. Phil Gingrey (House Committee on 
Energy and Commerce, Markup on H.R. 1173, the Fiscal Responsibility and 
Retirement Security Act of 2011, 112th Cong., p. 228 (Nov. 30, 2011) 
(transcript of the proceeding)); Rep. Joe Barton (Subcommittee on 
Health, House Committee on Energy and Commerce, Markup on H.R. 1173, 
the Fiscal Responsibility and Retirement Security Act of 2011, 112th 
Cong., p. 9 (Nov. 15, 2011) (transcript of the proceeding)); Rep. 
Michael Burgess (Subcommittee on Health, House Committee on Energy and 
Commerce, Markup on H.R. 1173, the Fiscal Responsibility and Retirement 
Security Act of 2011, 112th Cong., p. 46 (Nov. 15, 2011) (transcript of 
the proceeding)); Rep. Joe Pitts (Subcommittee on Health, House 
Committee on Energy and Commerce, Hearing on the Implementation and 
Sustainability of the New Government-Administered Community Living 
Assistance Services and Supports (CLASS) Program, 112th Cong., p. 4 
(Mar. 17, 2011) (transcript of the proceeding)); and Rep. John Dingell 
(Subcommittee on Health, House Committee on Energy and Commerce, 
Hearing on the Implementation and Sustainability of the New Government-
Administered Community Living Assistance Services and Supports (CLASS) 
Program, 112th Cong., p. 24 (Mar. 17, 2011) (transcript of the 
proceeding)).
---------------------------------------------------------------------------
    Beyond these figures is the emotional and financial toll 
that Medicaid long-term care coverage entails. Medicaid 
eligibility for such care depends upon an individual's meeting 
limited income and asset tests.\23\ Thus, for too many seniors 
and disabled people in need of long-term care, Medicaid only 
becomes an option after they have suffered devastating 
financial losses, and have been forced to spend-down their 
income and assets into poverty.\24\ As a matter of personal 
dignity and basic fairness, members also agree that Medicaid 
should not be the national answer to our long-term crisis.\25\
---------------------------------------------------------------------------
    \23\Kaiser Family Foundation, Medicaid: A Primer (2010) (online at 
http://www.kff.org/ medicaid/upload/7334-04.pdf).
    \24\Judith Feder, Harriet L. Komisar, and Paul Van de Water, The 
Opportunities of CLASS, The American Prospect (Sept. 22, 2010) (online 
at http://prospect.org/cs/articles? 
article=the_opportunities_of_class).
    \25\Rep. Diana DeGette summed up this view best: ``[T]he present 
situation [Medicaid] is both fiscally and morally wrong.'' 
(Subcommittee on Oversight and Investigations and Subcommittee on 
Health, House Committee on Energy and Commerce, Joint Hearing on Class 
Cancelled: An Unsustainable Program and Its Consequences for the 
Nation's Deficit, 112th Cong., p. 15 (Oct. 26, 2011) (transcript of the 
proceeding)).
---------------------------------------------------------------------------
    Republicans argue that private long-term care insurance is 
the best option.\26\ Although we agree that there is an 
appropriate role for the private market, we believe the record 
clearly demonstrates that private insurance has not lived up to 
its billing. Premiums tend to be too expensive for most 
individuals to afford, particularly those with pre-existing 
conditions.\27\ Even for those who are able to purchase 
coverage, private policies often impose restrictions on covered 
services and providers, limitations on maximum benefits, and 
uncertainty about future rate increases.\28\ As a result, fewer 
than 10% of Americans aged 50 or older currently own these 
policies.\29\
---------------------------------------------------------------------------
    \26\The Republican position on private long-term care insurance is 
captured well by Rep. Michael Burgess: ``There is no one who believes 
in private long-term care insurance more than I do. . . . I think it is 
the correct response of my generation to that generation that is coming 
after us.'' (House Committee on Energy and Commerce, Markup on H.R. 
3200, America's Affordable Health Choices Act of 2009, 111th Cong., p. 
274 (July 20, 2009) (transcript of the proceeding)).
    \27\Testimony of Kathy Greenlee, HHS Assistant Secretary for Aging, 
Subcommittee on Oversight and Investigations and Subcommittee on 
Health, House Committee on Energy and Commerce, Joint Hearing on Class 
Cancelled: An Unsustainable Program and Its Consequences for the 
Nation's Deficit, 112th Cong., pp. 50-51 (Oct. 26, 2011) (transcript of 
the proceeding)). See also LeadingAge, Long Term Care Solutions--The 
Problem (online at http://www.aahsa.org/ article.aspx?id=308) (accessed 
Oct. 24, 2011).
    \28\Judith Feder, Harriet L. Komisar, Robert B. Friedland, Long-
term Care Financing: Policy Options for the Future, Georgetown 
University Long-term Care Financing Project (June 2007) (online at 
http://ltc.georgetown.edu/forum/ltcfinalpaper061107.pdf).
    \29\Congressional Research Service, Community Living Assistance 
Services and Supports (CLASS) Provisions in the Patient Protection and 
Affordable Care Act (ACA), p. 3 (Nov. 14, 2011) (R40842).
---------------------------------------------------------------------------
    Republicans also promote the HHS Long-Term Care Partnership 
Program to underscore their support for a market-based approach 
to our long-term care problem.\30\ Originally conceived in the 
early 1990s,\31\ this state-based program is designed to reduce 
Medicaid long-term care expenditures. Under the Program, states 
guarantee Medicaid coverage to people whose state-approved 
private long-term care insurance policy does not, over time, 
sufficiently cover the costs of their long-term care--while 
also allowing such individuals to protect a specified amount of 
personal assets. The Program was re-instated as part of the 
Deficit Reduction Act of 2005.\32\ In 2005, four states 
(California, Connecticut, Indiana, and New York) operated 
programs with a total of 172,000 Partnership participants.\33\ 
While at least 40 states now run Partnership programs, the 
number of individuals taking part in them has increased to only 
some 280,000 people,\34\ hardly a significant number given the 
millions of Americans in need of long-term care.
---------------------------------------------------------------------------
    \30\See, e.g., remarks of Rep. Phil Gingrey (p. 189) and Rep. 
Michael Burgess (p. 190) (House Committee on Energy and Commerce, 
Markup on H.R. 1173, the Fiscal Responsibility and Retirement Act of 
2011, 112th Cong., (Nov. 30, 2011) (transcript of the proceeding)).
    \31\Robert Wood Johnson Foundation, Long-Term Care Partnership 
Expansion: A New Opportunity for States (May 2007) (online at http://
www.chcs.org/usr_doc/Long-Term_ Care_Partnership_Expansion.pdf).
    \32\P.L. 109-171, Section 6021.
    \33\Letter from John E. Dicken, Director, Health Care, U.S. 
Government Accountability Office to Sen. Charles Grassley and Sen. John 
Rockefeller regarding the Long-Term Care Partnership Program (Sept. 9, 
2005) (online at http://www.gao.gov/new.items/d051021r.pdf).
    \34\Rep. Phil Gingrey, House Committee on Energy and Commerce, 
Markup on H.R. 1173, the Fiscal Responsibility and Retirement Act of 
2011, 112th Cong., pp. 188-189 (Nov. 30, 2011) (transcript of the 
proceeding).
---------------------------------------------------------------------------

                             CLASS Program


Program description

    It was against this backdrop that the Committee included 
legislation\35\ to establish the CLASS Program as part of the 
health reform package passed by the Committee in 2009. The 
legislation was adopted as an amendment--on a bipartisan vote--
during the markup of that package\36\ and subsequently, was 
included as part of the ACA that was signed into law in 2010.
---------------------------------------------------------------------------
    \35\H.R. 1721, a bill to establish CLASS, was introduced by Rep. 
Frank Pallone and Rep. John Dingell on Mar. 25, 2009. Its Senate 
companion piece, S. 697, was introduced by Sen. Ted Kennedy on the same 
day.
    \36\House Committee on Energy and Commerce, Markup on H.R. 3200, 
America's Affordable Health Choices Act of 2009, 111th Cong., p. 293 
(July 20, 2009) (transcript of the proceeding).
---------------------------------------------------------------------------
    Under the ACA, CLASS is housed in a new Title XXXII of the 
Public Health Service Act (PHSA). Title XXXII establishes a 
process for the HHS Secretary to develop the CLASS Program to 
provide a cash benefit that eligible enrollees can use to 
purchase various long-term care services and supports (LTSS). 
Unlike medical treatments, LTSS assist individuals in their 
day-to-day activities of daily living such as bathing, 
dressing, eating and toileting. They include a wide range of 
health and social services and supports to people who have 
functional disabilities or cognitive impairments over an 
extended period of time, with the goal of maximizing their 
independence.\37\
---------------------------------------------------------------------------
    \37\Congressional Research Service, Community Living Assistance 
Services and Supports (CLASS) Provisions in the Patient Protection and 
Affordable Care Act (ACA), p. 2 (Nov. 14, 2011) (R40842).
---------------------------------------------------------------------------
    Title XXXII requires the HHS Secretary to develop and 
designate a CLASS Independence Benefit Plan through which LTTS 
would be available to eligible enrollees. The Plan must be 
designed to best balance price and benefits to meet the needs 
of its enrollees in an actuarially sound manner while 
optimizing the probability of the long-term sustainability of 
the program.\38\ In developing such Plan, the Secretary is also 
required to consult with the CLASS Independence Advisory 
Council that is established under Title XXXII as well. The 
Advisory Council is to be comprised of 15 experts in long-term 
care (including long-term care insurance and actuarial science) 
and is specifically charged to advise the Secretary ``on 
matters of general policy in administration of the CLASS 
Program.''\39\
---------------------------------------------------------------------------
    \38\PHSA Section 3203(a)(2)(B).
    \39\PHSA Section 3207(c). To date, HHS has received over 140 
applications for appointment to the Council; no members have yet been 
named.
---------------------------------------------------------------------------
    As currently structured, CLASS is open to working adults 18 
years of age or older who are not currently living in a nursing 
home or other institution. To qualify for benefits, enrollees 
are required to have paid premiums for at least five years and 
have been actively working for a minimum of three of those 
years. To receive benefits, enrollees must be unable to perform 
at least two or three activities of daily living, and this 
limitation must be expected to continue for at least 90 days. 
Over a life-time, a Program enrollee could have several 
separate instances of qualifying for benefits.\40\
---------------------------------------------------------------------------
    \40\PHSA Sections 3202 and 3203.
---------------------------------------------------------------------------
    The CLASS Program would provide enrollees with a cash 
benefit averaging at least $50 per day. The Program also 
specifies payment rules for enrollees who are Medicaid 
beneficiaries, applying a portion of the cash benefit towards 
the facility cost (in the case of institutionalized 
beneficiaries), or towards a state's cost of providing home and 
community-based services (in the case of non-institutionalized 
beneficiaries). The cash benefit is not subject to any annual 
or lifetime limits and continues until the enrollee no longer 
has a qualifying disability.\41\
---------------------------------------------------------------------------
    \41\PHSA Section 3205.
---------------------------------------------------------------------------
    As required by law, CLASS must be self-sufficient. 
Financial support for the Program is to come entirely through 
enrollee premiums and the Program must be demonstratively 
solvent over 20- and 75-year periods. Taxpayer funds are 
specifically prohibited from being used to pay for 
benefits.\42\
---------------------------------------------------------------------------
    \42\PHSA Section 3208.
---------------------------------------------------------------------------

Program implementation

    Since its inception, concerns have been raised about the 
long-term financial viability of CLASS--as it is currently 
designed.\43\
---------------------------------------------------------------------------
    \43\Congressional Research Service, Community Living Assistance 
Services and Supports (CLASS) Provisions in the Patient Protection and 
Affordable Care Act (ACA), p. 15, (Nov. 14, 2011) (R40842).
---------------------------------------------------------------------------
    In response to these concerns (as well as criticism about 
the overall implementation process), HHS recently released a 
report to update Congress, Program advocates, and other 
interested parties on the status of CLASS. The report, titled A 
Report on the Actuarial, Marketing, and Legal Analyses of the 
CLASS Program,\44\ details the Department's efforts over the 
past 19 months to ensure that CLASS is designed to be 
actuarially sound and financially solvent, while meeting other 
statutory requirements. Among its many CLASS-related actions 
during this time, the Department convened an interagency long-
term care work group; commissioned external analyses and 
conducted its own analyses on benefit plan design and other 
issues central to Program implementation; conducted over 75 
stakeholder meetings; began to develop implementing 
regulations; and initiated marketing research.
---------------------------------------------------------------------------
    \44\Department of Health and Human Services, Report on the 
Actuarial, Marketing, and Legal Analyses of the CLASS Program (Oct. 
2011) (online at http://aspe.hhs.gov/daltcp/reports/2011/class/
index.shtml).
---------------------------------------------------------------------------
    As part of this effort, HHS modeled eight different benefit 
plans, including one that is based on the most natural reading 
of the CLASS authorizing statute. Each such plan is described 
in the Department's Report. As noted in the Report, some of the 
benefit plans and features evaluated by the Department would 
require additional statutory authority to implement. The 
Department's comments offer important insight into potential 
adjustments to current law that could potentially allow CLASS 
to move forward as intended--both substantively and 
financially.
    Nonetheless, the HHS report concluded that as presently 
structured, CLASS cannot be carried out in a manner that would 
meet its statutory requirements. Accordingly, HHS Secretary 
Sebelius has instructed that implementation of CLASS be 
suspended.\45\ However, in her memo accompanying the Report, 
Assistant Secretary for Aging Kathy Greenlee clearly states 
that HHS intends to continue to work with Congress and long-
term care stakeholders to explore ways to address the nation's 
pressing long-term care needs.\46\
---------------------------------------------------------------------------
    \45\Letter from Kathleen G. Sebelius, HHS Secretary to Rep. John 
Boehner, Speaker of the House regarding the CLASS Program (Oct. 14, 
2011) (online at http://www.hhs.gov/secretary/letter10142011.html).
    \46\Memorandum on the CLASS Program from Kathy Greenlee, HHS 
Assistant Secretary for Aging to Kathleen Sebelius, HHS Secretary (Oct. 
14, 2011) (online at http://aspe.hhs.gov/daltcp/reports/2011/class/
CLASSmemo.shtml).
---------------------------------------------------------------------------

         Additional Long-Term Care Provisions in Title VIII of 
                                the ACA


National Clearinghouse for Long-Term Care

    Established under Section 6021(d) of the 2005 Deficit 
Reduction Act,\47\ the HHS National Clearinghouse for Long-Term 
Care Information is designed to educate consumers on their 
long-term care options, including Medicaid and private long-
term care insurance.\48\ Under the 2005 law, the Clearinghouse 
was authorized at a mandatory funding level of $3 million for 
each of the years from FY 2006 through FY 2010.
---------------------------------------------------------------------------
    \47\P.L. 109-171.
    \48\Department of Health and Human Services, National Clearinghouse 
for Long-Term Care Information (online at http://www.longtermcare.gov/
LTC/Main_Site/index.aspx) (accessed Nov. 9, 2011).
---------------------------------------------------------------------------
    HHS utilized these funds to launch its ``Own Your Future'' 
initiative in partnership with both the National Governors 
Association and the National Conference of State Legislatures 
to promote awareness among recent and near retirees about the 
importance of planning ahead for their long-term care 
needs.\49\ The initiative used direct mail (including a letter 
from state governors) and media spots to encourage individuals 
between ages 50 and 70 to request a long-term care planning kit 
developed by HHS. Five states (Arkansas, Idaho, Nevada, New 
Jersey, and Virginia) initially participated in the program; it 
was later expanded to include 20 states and the District of 
Columbia.\50\ All told, ``Own Your Future'' reached over 18 
million residents in 26 states during the Clearinghouse's 
initial authorization period, with approximately 1.5 million 
individuals requesting further information on long-term care 
planning.\51\
---------------------------------------------------------------------------
    \49\Department of Health and Human Services, Final Report: ``Own 
Your Future '' Consumer Survey (Nov. 30, 2006) (online at http://
aspe.hhs.gov/daltcp/reports/2006/OYFsurvey.htm).
    \50\Additional states included Colorado, Georgia, Iowa, Kansas, 
Kentucky, Maryland, Massachusetts, Michigan, Missouri, Nebraska, North 
Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, 
Tennessee, Texas, and Washington.
    \51\Department of Health and Human Services, ``Own Your Future'' 
Long-Term Care Awareness Campaign Response Summary (July 28, 2010).
---------------------------------------------------------------------------
    Title VIII of the ACA reauthorizes the National 
Clearinghouse through FY 2015, making $15 million in total 
mandatory funding ($3 million for each of FY 2011 through FY 
2015) available for this resource.\52\ Such funding would allow 
the Clearinghouse to build on its previous work with the states 
in providing important and unbiased information about both the 
need for long-term planning and the availability of various 
long-term care options.
---------------------------------------------------------------------------
    \52\ACA, Section 8002(d).
---------------------------------------------------------------------------
    In FY 2011, HHS issued the Promoting Long-Term Care 
Awareness solicitation to renew the ``Own Your Future'' 
initiative and transition from direct mail to Internet-based 
activities, including use of social media. HHS reports that it 
has recently awarded a one-year contract, with an option for 
renewal, to continue work on this project.

Personal Care Attendants Workforce Advisory Panel

    Title VIII also establishes the Personal Care Attendants 
Workforce Advisory Panel to provide counsel to the Congress and 
the HHS Secretary on workforce issues related to personal care 
attendant workers.\53\ Personal care attendants are individuals 
trained to enable the elderly and people with disabilities to 
continue to reside in their homes or within their communities 
by assisting with activities of daily living. This discipline 
is an important part of ensuring the adequacy of LTSS since a 
high proportion of people with long-term care needs reside 
outside of institutions.
---------------------------------------------------------------------------
    \53\ACA, Section 8002(c).
---------------------------------------------------------------------------
    The 15 inaugural members of the Advisory Panel have already 
been named; their work is expected to get underway shortly.

                       H.R. 1173: ``Just Say No''

    The Republican response to all of this--to CLASS, to the 
National Clearinghouse for Long-Term Care and to the Personal 
Attendants Workforce Advisory Panel--is to ``just say no.'' And 
that is exactly what H.R. 1173 sets out to do--to terminate the 
only significant federal program dedicated to the provision of 
LTSS; to end the guaranteed funding mechanism for the National 
Clearinghouse; and to stop a workforce advisory group that has 
already been appointed. This despite Republican claims that 
they join with us in recognizing that: (1) the United States is 
facing a potentially catastrophic long-term care crisis;\54\ 
(2) Medicaid can no longer be viewed as the answer to this 
crisis;\55\ (3) CLASS seeks to address an important policy 
goal;\56\ and (4) the National Clearinghouse is an essential 
tool in educating the public about long-term planning and long-
term care options, including private insurance policies.\57\
---------------------------------------------------------------------------
    \54\Supra, footnote 1.
    \55\Supra, footnote 22.
    \56\Supra, footnote 4.
    \57\At the full Committee markup, Rep. Lee Terry offered an 
amendment (that was adopted) to restore funding authority for the 
National Clearinghouse that would have been taken away completely under 
H.R. 1173. During the debate on the amendment, Republicans spoke in 
strong support for the Clearinghouse. See, e.g., remarks of Rep. Lee 
Terry (p. 180), Rep. Phil Gingrey (p. 189), and Rep. Michael Burgess 
(p. 190) (House Committee on Energy and Commerce, Markup on H.R. 1173, 
the Fiscal Responsibility and Retirement Act of 2011, 112th Cong. (Nov. 
30, 2011) (transcript of the proceeding)). For further commentary on 
the Terry amendment, see footnote 61, infra.
---------------------------------------------------------------------------
    What would Republicans put in place instead? Absolutely 
nothing. For those in need of LTSS, Republicans would keep the 
status quo--reliance on Medicare that offers very little 
coverage of these services; on Medicaid that robs the elderly 
and disabled of their dignity and financial resources; and on 
the private long-term care insurance market whose policies are 
far too costly for most Americans to afford. And for those 
seeking guidance on how best to prepare for a time when long-
term care services may be needed, Republicans would allow the 
National Clearinghouse to be zeroed out altogether during the 
annual appropriations process. Enactment of H.R. 1173 would 
produce both of these results.
    This scorched-earth approach to the entirety of Title VIII 
of the ACA was clearly demonstrated throughout the full 
Committee mark up of H.R. 1173. Indeed, during the proceedings, 
Republicans:
           Rejected a process through which CLASS could 
        be reviewed and evaluated by experts (the CLASS 
        Independence Advisory Council) and adjusted and 
        improved by Congress;\58\
---------------------------------------------------------------------------
    \58\See debate on the amendments offered by Rep. Frank Pallone 
(House Committee on Energy and Commerce, Markup on H.R. 1173, the 
Fiscal Responsibility and Retirement Act of 2011, 112th Cong., pp. 203-
221 (Nov. 30, 2011) (transcript of the proceeding)).
---------------------------------------------------------------------------
           Rejected the establishment of an alternative 
        long-term care program to replace CLASS;\59\
---------------------------------------------------------------------------
    \59\See debate on the amendment offered by Rep. Ed Towns (House 
Committee on Energy and Commerce, Markup on H.R. 1173, the Fiscal 
Responsibility and Retirement Act of 2011, 112th Cong., pp. 222-240 
(Nov. 30, 2011) (transcript of the proceeding)).
---------------------------------------------------------------------------
           Rejected penetration of the private long-
        term care insurance market as the standard by which 
        repeal of CLASS should be measured;\60\ and
---------------------------------------------------------------------------
    \60\See debate on the amendment offered by Rep. Eliot Engel (House 
Committee on Energy and Commerce, Markup on H.R. 1173, the Fiscal 
Responsibility and Retirement Act of 2011, 112th Cong., pp. 241-257 
(Nov. 30, 2011) (transcript of the proceeding)).
---------------------------------------------------------------------------
           Rejected current law (which Republicans 
        originally supported) to provide mandatory spending for 
        the National Clearinghouse for Long-Term Care.\61\
---------------------------------------------------------------------------
    \61\See debate on the amendment offered by Rep. Lois Capps. (House 
Committee on Energy and Commerce, Markup on H.R. 1173, the Fiscal 
Responsibility and Retirement Act of 2011, 112th Cong., pp. 182-202 
(Nov. 30, 2011) (transcript of the proceeding)).
    The Capps amendment was offered as a second degree amendment to the 
amendment offered By Rep. Lee Terry that would retain the ACA's 
extension of the authority for the National Clearinghouse through FY 
2015, but would also convert its funding stream from mandatory spending 
to discretionary spending, subjecting the Clearinghouse to the vagaries 
of the annual HHS appropriations process. It should be noted that the 
Terry Amendment was filed nearly three hours after the Capps Amendment 
was released, suggesting that Republicans chose to reverse course only 
upon learning that their position on the National Clearinghouse would 
be challenged and calling into question their firm conviction that 
private long-term insurance is the best way to solve the country's 
long-term care problem.
---------------------------------------------------------------------------
    In sum: While our Republican colleagues have joined us in 
recognizing that we face an immediate and pressing long-term 
care challenge as a nation, they have refused to join us--or 
their constituents in need--in meeting this challenge. Instead, 
they place their faith in what is not working and argue that it 
is best to put off debate on the issue until another day. We 
believe such a position is both misguided and untenable and, 
therefore, must be rejected. Consistent with this view, we must 
also reject H.R. 1173.

                An Anti-Health Reform Ideological Agenda

    The ``just say no'' view expressed through H.R. 1173 is 
consistent with the Republican anti-health reform ideological 
agenda. What Republicans have not been able to achieve in whole 
cloth,\62\ they are now attempting to do piece by piece.\63\ 
H.R. 1173 puts the CLASS Program in the frontline of this 
ongoing assault.
---------------------------------------------------------------------------
    \62\Although the House of Representatives has passed a bill to 
repeal the ACA (H.R. 2), that legislation will not become law since the 
Senate has defeated the proposal. (H.R. 2 passed the House on January 
22, 2011 (Congressional Record, H322-323). The Senate defeated a 
similar proposal the following month on February 2, 2011 (Congressional 
Record S475)). In any case, President Obama has made clear that he will 
veto any such legislation. (Executive Office of the President, Office 
of Management and Budget, Statement of Administration Policy: H.R. 2--
Repealing the Affordable Care Act (Jan. 6, 2011) (online at http://
www.whitehouse.gov/sites/default/files/omb/legislative/sap/112/
saphr2r_20110106.pdf)).
    \63\Efforts in the House of Representatives to repeal or otherwise 
destroy individual parts of the ACA include: H.R. 358, Protect Life Act 
(passed the House on Oct. 13, 2011 (Congressional Record, H6885-6903)); 
H.R. 1214, To Repeal Mandatory Funding for School-Based Health Center 
Construction (passed the House on May 4, 2011 (Congressional Record 
H2969-2977)); H.R. 1216, To Convert Funding for Graduate Medical 
Education in Qualified Teaching Centers from Direct Appropriations to 
an Authorization of Appropriations (passed the House on May 25, 2011 
(Congressional Record H3361-3388; H3396-3401; H3430-3434)); and H.R. 
1217, To Repeal the Prevention and Public Health Fund) (passed the 
House on Apr. 13, 2011 (Congressional Record H2633-2647)). To date, 
none of these bills has been considered by the Senate.
---------------------------------------------------------------------------
    But in this instance, Republicans have gone beyond their 
``just say no'' mantra and have asserted an additional line of 
attack in opposition to CLASS. Time and again, Republicans 
claim that CLASS was only included in the ACA as a ``budget 
gimmick''; as a way to help pay for the ACA\64\--this despite 
unequivocal testimony to the contrary.
---------------------------------------------------------------------------
    \64\See, e.g., Sen. John Thune, Rep. Fred Upton, Rep. Joe Pitts, 
Rep. Cliff Stearns, Rep. Denny Rehberg et al., CLASS' Untold Story: 
Taxpayers, Employers, and States on the Hook for Flawed Entitlement 
Program (Sept. 2011) (online at http://energycommerce.house.gov/media/
file/pdfs/class/classuntoldstoryreport.pdf). See also remarks of Rep. 
Joe Pitts (p. 3); Rep. Marsha Blackburn (pp. 19-20); Rep. Michael 
Burgess (pp. 23-24); and Rep. Charles Boustany (p. 45) (Subcommittee on 
Oversight and Investigations and Subcommittee on Health, House 
Committee on Energy and Commerce, Joint Hearing on Class Cancelled: An 
Unsustainable Program and Its Consequences for the Nation's Deficit, 
112th Cong. (Oct. 26, 2011) (transcript of the proceeding)).
---------------------------------------------------------------------------
    At the October 2011 hearing on CLASS, in response to 
questions on this issue, the HHS Assistant Secretary for 
Planning and Evaluation testified that the Administration 
supported CLASS because of ``the indisputable need to protect 
people from the cost of long-term care services'' and that the 
estimated savings attributed to CLASS by the Congressional 
Budget Office (CBO) during the health reform debate\65\ were 
``certainly encouraging,'' but in no way were the definitive 
argument for including CLASS within the ACA.\66\ The Assistant 
Secretary went on to state that even after discounting the 
savings CBO initially projected for CLASS, the ACA would still 
save more than $120 billion during the next 10 years and over 
one trillion dollars in the subsequent decade.\67\ She also 
underscored the point that over 30 million Americans are 
expected to gain health insurance when the ACA is fully 
implemented and detailed the ACA benefits already experienced 
by seniors, small businesses, and young adults--none of which 
would be impacted by the Department's decision to defer work on 
CLASS.\68\
---------------------------------------------------------------------------
    \65\In December 2009, CBO estimated CLASS provisions would reduce 
deficits by $72 billion over the 10-year period from 2010 through 2019, 
including $2 billion in Medicaid savings. (Letter from Douglas W. 
Elmendorf, Director, Congressional Budget Office to Sen. Harry Reid, 
Leader, Senate (Dec. 19, 2009) (online at http://www.cbo.gov/ftpdocs/
108xx/doc10868/12-19-Reid_Letter_Managers_Correction_Noted.pdf)). CBO 
most recently estimated that prior to HHS' announcement to suspend 
implementation of the Program, CLASS would have reduced the deficit by 
$81 billion over the 10-year period from 2012 through 2021. The 
estimate does not include $2 billion in savings to Medicaid. 
(Congressional Budget Office Cost Estimate of H.R. 1173, Fiscal 
Responsibility and Retirement Security Act of 2011 (Dec. 2, 2011)).
    \66\Testimony of Sherry Glied, HHS Assistant Secretary for Planning 
and Evaluation, Subcommittee on Oversight and Investigations and Health 
Subcommittee, House Committee on Energy and Commerce, Joint Hearing on 
Class Cancelled: An Unsustainable Program and Its Consequences for the 
Nation's Deficit, 112th Cong., pp. 75-76 (Oct. 26, 2011) (transcript of 
the proceeding)).
    \67\Ibid at p. 74.
    \68\Ibid at pp. 91-93.
---------------------------------------------------------------------------
    Nonetheless, Republicans have persisted in misrepresenting 
both the relevance of the initial CBO score for CLASS in paying 
for the ACA and the fiscal impact of suspending the Program's 
implementation.\69\ In our view, this is nothing more than part 
of the Republican strategy to disrupt, dismantle, and 
ultimately destroy the ACA. For this reason as well, we oppose 
H.R. 1173.
---------------------------------------------------------------------------
    \69\See, e.g., remarks of Rep. Fred Upton (House Committee on 
Energy and Commerce, Markup on H.R. 1173, the Fiscal Responsibility and 
Retirement Security Act of 2011, 112th Cong., p. 8 (Nov. 29, 2011) 
(transcript of the proceeding)); Rep. Joe Pitts (Subcommittee on 
Health, House Committee on Energy and Commerce, Markup on H.R. 1173, 
the Fiscal Responsibility and Retirement Security Act of 2011, 112th 
Cong., p. 3 (Nov. 15, 2011) (transcript of the proceeding)); and Rep. 
Tim Murphy (Subcommittee on Health, House Committee on Energy and 
Commerce, Markup on H.R. 1173, the Fiscal Responsibility and Retirement 
Security Act of 2011, 112th Cong., p. 13 (Nov. 15, 2011) (transcript of 
the proceeding)).
---------------------------------------------------------------------------

                               Conclusion

    We agree that the CLASS statute has not been crafted 
perfectly--no complicated piece of legislation is, especially 
one that is as novel and unique as CLASS. But regrettably, 
Republicans--as part of their all out war on the ACA--have 
chosen to tear CLASS down altogether rather than work with us 
and HHS to make it right. That is what we can and should do in 
order to achieve the goal we all share--ensuring that Americans 
who require long-term services and supports are able to get 
what they need without the threat of impoverishment.
    We stand ready to take up the challenge of long-term care 
with our Republican colleagues and hope they will join in such 
an effort. In the meantime, we also stand by the long-term care 
framework presented by CLASS and in turn, must oppose H.R. 
1173.

                                   Henry A. Waxman.
                                   Edolphus Towns.
                                   Tammy Baldwin.
                                   G.K. Butterfield.
                                   Diana DeGette.
                                   Bobby L. Rush.
                                   Edward J. Markey.
                                   Donna M. Christensen.
                                   Anna G. Eshoo.
                                   Kathy Castor.
                                   Frank Pallone, Jr.
                                   Lois Capps.
                                   Jan Schakowsky.
                                   John D. Dingell.
                                   Jay Inslee.
                                   Eliot L. Engel.
                                   Gene Green.
                                   Doris O. Matsui.
                                   Mike Doyle.
                                   Charles A. Gonzalez.