In a surprise move the White House dropped today one of the more budget busting provisions of the Obamacare legislation, called the CLASS Act (Community Living Assistance Services and Supports), it was designed to provide people with long term in-home care. The CLASS Act wasn’t part of the Obamacare debate, and few people outside of those who read the legislation knew about it but experts agreed that it could’ve exploded the federal budget deficit down the road and personal budgets before that.
The Community Living Services and Support (CLASS) Act was designed to assist people who need in-home assistance with basic daily tasks There are a few problems with the plan. First of all Congress wrote the legislation so people were automatically enrolled in the plan, employers were to automatically take the money out of your check unless one opted-out. The plan, was constructed in a way that it couldn’t pay for itself over the long run and it would have have been one of the biggest budget busting parts of Obamacare.
According to Kathleen Sebelius the Care Act was dropped because they even the free-spending Obama Administration couldn’t find a way to make it financially viable.
But a senior administration official told CNN that there were big questions whether CLASS could be self-sustaining even when the health care reform law was being considered by Congress. And as a result, lawmakers specified that the HHS secretary had to determine that the program would be sustainable for 75 years before certifying it.
In a blog entry on Healthcare.gov, Sebelius cited warnings that not enough young healthy people would sign up.
“This could have led to a vicious cycle where premiums would have to be set higher and higher to cover the likely costs of benefits, leading fewer and fewer healthier people to sign up for the program,” she wrote.
Sebelius said she wasn’t giving up.
“So even as we suspend work on implementing CLASS, we are recommitting ourselves to the ultimate goal of making sure Americans can get the long-term care they need, whether it’s a working-age mom with disabilities who needs daily support right now or a young man at his first job who wants to protect himself and his family against the possibility of huge long-term care costs in the future,” Sebelius wrote.
House Budget Committee Chairman Ryan issued this statement about the end of the Class Act.
“To hide the true cost of their health-care overhaul, the leaders of the Democratic party loaded it with gimmicks and double-counting. One of the most egregious of these gimmicks involved the CLASS Act, a new long-term care program that was scored as an offset against the ten-year, trillion-dollar cost of the Democrats new law. Independent health care experts warned that the CLASS Act program would turn into a classic ‘insurance death spiral.’ Not only would the short-term savings fail to materialize, but the long-term costs would prove catastrophically high. Even Democratic Senator Kent Conrad called the program ‘A Ponzi scheme Bernie Madoff would have been proud of.’
“Today, the Obama Administration finally surrendered to reality: Health and Human Services Secretary Kathleen Sebelius has informed Congressional leaders that she ‘does not see a viable path forward for CLASS implementation at this time.’ The smoke and mirrors that the Democrats employed to sell their health care overhaul are finally falling away, one broken promise at a time. When all of these gimmicks are stripped out, the new law would add hundreds of billions of dollars in red ink over the next decade, as health-care costs send the debt spiraling out of control. Now it is time for Congress to do the responsible thing: Repeal the disastrous new law and replace it with true, patient-centered reforms.
The Dropping of the Class Act just a small victory in the “war” against Obamacare. As Rep Ryan said above, now it is time to get rid of the entire disastrous health care law, our grandchildren are depending on us.