CP Politics

Thursday, Oct 23, 2014

Obama Administration Abandons CLASS Health Care Program

  • (Photo: REUTERS / Joshua Roberts)
    Kathleen Sebelius, Secretary of Health and Human Services, testifies to the Senate Finance Committee in Washington on March 16, 2011.
October 17, 2011|1:15 pm

The Community Living Assistance Services and Supports program, part of the Patient Protection and Affordable Care Act (2010), also known as “Obamacare,” was intended to provide for the cost of long-term care for the elderly. In a letter to Congress on Friday, Department of Health and Human Services Secretary Kathleen Sebelius announced the program is fiscally unsustainable and will have to be abandoned.

Affordable Care Act opponents argue that Sebelius' action signals the unraveling of the health care law. Proponents argue that the failure of CLASS is due to the lack of a mandate, which is present in the main part of the Affordable Care Act.

CLASS would have provided for nursing home care, home health care and rehabilitation for serious injuries. Medicare will only pay for these services for a short period. Medicaid will pay for the services, but only the poor are eligible for Medicaid. Since long-term care can be expensive, many families will exhaust all their savings before becoming eligible for Medicaid coverage.

CLASS was intended to help families pay for long-term care by offering insurance for the services. It was to be a voluntary program in which participants would pay premiums, less than $200 per month, to enroll in the program, and the program would pay the cost of long-term care when participants required the services.

To keep the program affordable, it would need lots of young, healthy participants to pay into the program over a long period, but an inability to attract those types of participants ultimately made the program, which was supposed to pay for itself, financially unsustainable.

The only way to pay for the program would be through government revenues, government debt or to mandate coverage for everyone. CLASS was put into the Affordable Care Act by the late Sen. Edward Kennedy (D-Mass.). At the time, most liberal Democrats wanted to require that everyone obtain coverage. That proved politically unfeasible, so it was made a voluntary program.

CLASS was supposed to have a net revenue surplus of $86 billion over 10 years. When the Affordable Care Act was passed, President Obama touted that fact that, according to the Congressional Budget Office, the law would reduce budget deficits by about $138 billion. Most of those supposed savings came from CLASS. Republicans referred to that accounting as a budget gimmick because participants would pay into the program for five years before becoming eligible. Those five years of payments were counted as a net budget surplus, even though the program was supposed to be self-financing.

Republicans were not the only critics of CLASS. The Democratic chair of the Senate Budget Committee, Kent Conrad (N.D.) said CLASS was “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”

Due to doubts about the fiscal sustainability of CLASS, Sen. Judd Gregg (R-N.H.) inserted a provision into the Affordable Care Act that required the Department of Health and Human Services to conduct an actuarial analysis of the 75-year costs to determine its sustainability. If it was found to be financially unsustainable, the program would have to be abolished under the law. This is the reason the administration must now abandon the program.

“For 19 months, experts inside and outside of government have examined how HHS might implement a financially sustainable, voluntary, and self-financed long-term care insurance program under the law that meets the needs of those seeking protection for the near term and those planning for the future. ... But despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time,” Sebelius wrote in her letter to Congress.

The conservative editors of The Wall Street Journal, critics of the Affordable Care Act, wrote on Monday, “President Obama was a mask of indifference with no response when (House Budget Chair) Paul Ryan took CLASS apart at the 2010 White House health summit. Democrats included it anyway, but now that the Administration itself has vindicated its critics, Republicans have a new political opportunity to make real health-care legislative progress.”

They also suggested adding an amendment like Gregg's to the entire health care law, such that if independent actuaries declared it financially unsustainable it would be automatically repealed.

Jonathan Cohn, columnist for the liberal The New Republic, argued that the failure of CLASS vindicates the Affordable Care Act because it was the lack of a mandate that doomed CLASS. The Affordable Care Act has an individual mandate to purchase health insurance.

“The sustainability of CLASS would not have been in such question if everybody had to sign up for it. In other words, if long-term care insurance were subject to an individual mandate, old and sick people would not have been the only people enrolling,” Cohn wrote.

Contact: napp.nazworth@christianpost.com
Source URL : http://www.christianpost.com/news/obama-administration-abandons-class-health-care-program-58332/