Fiscal Cliff Deal to Enhance Long Term Care Services

After months of back and forth debate between House Republicans and the Democratic Senate, a fiscal cliff deal has finally been settled to solve the nation’s budget crisis through the American Tax Relief Act of 2012 signed into law Wednesday by President Obama. 

The newly signed bill averted the fiscal cliff and left home health unchanged amid various spending cuts to government programs, reports the Paraprofessional Healthcare Institute (PHI). 

The bill, which will raise about $600 billion in taxes over the next decade, includes two key actions that will impact people receiving and providing long-term care, according to an article from Forbes.


The first measure Congress has taken in its efforts to curb the national budget is the repeal of the Community Living Assistance Services and Supports (CLASS) Act. Part of the Patient Protection and Affordable Care Act of 2010, the CLASS Act aimed to create a national long-term care insurance system.

Originally designed to provide a basic cash benefit for individuals who have become functionally disabled and require long-term care, the CLASS Act has since been abandoned by the Obama Administration. 

Criticized by both Republicans and Democrats, program premiums under the CLASS Act were found to be too expensive for most buyers, and without substantial changes, the program would be financially unstable, wires Forbes. 


The second measure describes a 15-member panel for the creation of a national long-term care commission. This panel, notes Forbes, would include White House-appointed members as well as Democratic and Republican leaders of both the Senate and House. 

Reflecting the interests of care recipients, caregivers, providers, state Medicaid officials and long-term care insurance companies, the commission aspires to one goal: 

“To develop plan for the establishment, implementation, and financing of a comprehensive, coordinated, and high-quality system that ensures the availability of long-term services and supports for individuals in need of such services and supports…and individuals desiring to plan for future long-term care needs,” writes Forbes.

Members of the commission, according to Forbes, must be chosen within a month and the panel must also submit a proposal to both Congress and the White House within six months after doing so. 

Included within the American Tax Relief Act of 2012 are details regarding four workforce issues in long-term care. 

The first relies on the suitability of long-term care workers to provide services that support those with long-term care needs, in numbers and skills. 

Second, there must be development within the workforce to continue delivery of high-quality services to patients.

Thirdly, the bill describes a development of entities with the capacity to serve as employers and fiscal agents for home health workers.

And lastly, states and the federal government must address infrastructural gaps to ensure long-term care is delivered to those who require it. 

Among other key points of the fiscal deal that will raise taxes by $600 billion over the next decade include cuts to defense, social security payroll, Medicare reimbursement to doctors, income taxes, unemployment benefits and changes to the alternative minimum tax. 

Written by Jason Oliva