Obama administration halts troubled long-term health plan

By Paige Winfield Cunningham

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The Washington Times

Friday, October 14, 2011

Sebelius

The Obama administration, admitting that a key part of its health care law is unworkable, has abandoned the long-term care provision for the elderly and infirm in its health care law because it could not certify that the program would ever pay for itself.
Secretary of Health and Human Services Kathleen Sebelius said the agency would not continue with the Community Living Assistance Services and Supports (CLASS) program, effectively confirming months of analysis showing the program to be financially unsustainable. The program was a priority of the late Sen. Edward M. Kennedy, Massachusetts Democrat, who pushed hard to have it included in President Obama’s national health law.
“Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time,” Mrs. Sebelius said in a letter Friday to House Speaker John A. Boehner.
Republicans who have vowed to roll back Mr. Obama’s biggest domestic achievement seized on the news to call into question the financial viability of the entire health care law package.

“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,” Senate Minority Leader Mitch McConnell said in a statement.

** FILE ** In this June 13, 2011, file photo Dena Robinson, from right, and Hannah Hoffman, join dozens of Medicare advocates gathered outside the Newseum in Washington. (AP Photo/Manuel Balce Ceneta, File)

“However, it is worth remembering that the CLASS Act is only one of the unwise, unsustainable components of an unwise, unsustainable law,” the Kentucky Republican added.
The CLASS program was designed to offer continuing care coverage to seniors and others in need of in-home services. For a monthly premium, beneficiaries would receive daily cash benefits of at least $50.
The financing concerns involved whether enough healthy beneficiaries would enroll in the program to make it financially sustainable in the long-term.
After analyzing the program for 19 months, HHS officials said they couldn’t find a way to structure the program to both meet the requirements outlined in the health care law and demonstrate it to be self-sustaining for the next 80 years.
“Achieving these two objectives has been the difficulty,” said Kathy Greenlee, assistant secretary for aging. “Everything we do to make the program more sound moves us away from the legal reading of the law.”
In the short term, however, CLASS would have helped the government pay for implementing the nearly $1 trillion Affordable Care Act. Projected to bring in $70 billion in the next decade, the program initially would have reduced the federal deficit, with enrollees required to pay into the program for five years before receiving back any benefits.
Clouds began gathering over CLASS just months after the health care law was passed, when Rick Foster, chief actuary of the Centers for Medicare and Medicaid Services, told officials that the program didn’t look “workable” and said it likely would collapse without the help of taxpayer subsidies.
In December 2010, Mr. Obama’s deficit-reduction commission said the CLASS program was widely viewed as financially unsound and recommended either reforming or repealing the program. And last month, a group of Senate Republicans demanded an explanation from Mrs. Sebelius about its future.
Sen. Orrin Hatch, Utah Republican and ranking member of the Finance Committee, called her response “a canary in a coal mine.”
“Today’s abandonment if the program is just the latest evidence demonstrating Obamacare’s devastating effects and ill-conceived policies,” Mr. Hatch said. “What will be next?”
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