Oct 17, 2011

HHS Will Not Implement CLASS Long-Term Care Insurance Plan

Posted by: Neal Stehly


HHS Will Not Implement CLASS Long-Term Care Insurance Plan.

There was widespread television and print media coverage over the weekend of an announcement by the Obama Administration that it would not implement a health reform provision called the Community Living Assistance Services and Supports program, or CLASS. Sources portrayed the decision as a blow to the Administration and the law. FOX and Friends (10/15, 8:30 a.m. EST, 1,165,673) reported that the "White House announced it will not move forward with" the CLASS program, "a key program in the president's health care overhaul." HHS Secretary Kathleen Sebelius informed "Congress it could not be implemented in time. This program was expected to launch next year," but was "said to have design and financial problems."

        The AP (10/14, Alonso-Zaldivar) reported that HHS has "pulled the plug on a major program in the president's signature health overhaul law -- a long-term care insurance plan dogged from the beginning by doubts over its financial solvency." This program, "targeted by congressional Republicans for repeal," became "the first casualty in the political and policy wars over the healthcare law. It had been expected to launch in 2013." Sen. John Thune, who led opposition to CLASS in the Senate, said, "This is a victory for the American taxpayer and future generations."

        Bloomberg News (10/15, Wayne, Armstrong) reported HHS said CLASS is "financially unsustainable." In a letter to congressional leaders, HHS Secretary Sebelius said, "I do not see a viable path forward for Class implementation at this time." CLASS "had been championed" by Sen. Edward Kennedy "before his death," but Republicans "called it an accounting gimmick whose premiums would be used to pay for other parts of the law and said Democrats vastly underestimated its future costs."

        The New York Times (10/15, A10, Pear, Subscription Publication) said the decision "was another setback for the new law, which is under attack in court, in Congress and in many state legislatures." Sebelius "said her decision 'does not affect the rest of the healthcare law,' which is supposed to provide coverage to more than 30 million people who are uninsured." The Los Angeles Times (10/15, Levey) also said the move "will not affect other parts of the sweeping law, including preparations for a major expansion of health insurance coverage starting in 2014, according to administration officials."

        The Wall Street Journal (10/15, Radnofsky, Subscription Publication) reported CLASS had been projected to generate billions in revenue early on, but its long-term obligation to meet claims payments was seen as problematic. Senate Minority Leader McConnell said, "The Obama Administration today acknowledged what they refused to admit when they passed their partisan health bill: The Class Act was a budget gimmick that might enhance the numbers on a Washington bureaucrat's spreadsheet but was destined to fail in the real world."

        The Washington Post (10/15, Aizenman) said while CLASS "had been dogged from the start by doubts about its feasibility, its elimination marks the first time the administration has backed away from a key piece of President Obama's signature legislative achievement."

        CQ (10/15, Ethridge, Subscription Publication) reported, "Many Democrats signaled they intend to try to devise a workable and affordable alternative to address the costs of long-term care, while Republicans used the announcement to revive their calls to repeal last year's health care law." GOP lawmakers "said shelving the program was insufficient and called on Congress to vote to repeal the program, a proposal that could allow the GOP to re-open the larger health care overhaul debate." In addition, "House Republicans wasted no time in scheduling an Oct. 26 hearing of two Energy and Commerce panels to explore the cancellation of the program and its effect on the deficit."

        More Commentary. A Wall Street Journal (10/15, Subscription Publication) editorial welcomed the announcement that the Department of Health and Human Services will close one of the Affordable Care Act's major new entitlement programs. The editorial saw HHS Secretary Kathleen Sebelius' decision to shut down the office in charge of creating the insurance program for long-term care as an admission that the Obama Administration's claim that the program would help to reduce the deficit reduction was a fantasy. According to the editorial, Democrats had finagled the figures during the healthcare debate to make it appear as if the program could reduce the deficit, but the program's killing proved that the numbers had always been an illusion.


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