Freedom New Mexico
One of the significant purported cost- savings of President Barack Obama’s massive health care overhaul was supposed to be the Community Living Assistance Services and Supports program, CLASS, which was to operate like a private insurance program collecting premiums upfront to pay later for long-term care.
On Friday, the Department of Health and Human Services announced CLASS is unworkable. The original plan to collect $150-a-month in premiums from each voluntary participant is grossly inadequate to pay for long-term care for illness, disability and nonmedical needs such as in-home caregivers.
Despite great efforts for two years to manipulate the numbers, estimated monthly premiums increased to $235 to $391 per participant, and could have even have reached as high as $3,000 under some models. The act was to begin in 2012.
“At this point, we do not have a viable path forward to implement the CLASS Act,” HHS announced.
Congressional Republicans pronounced CLASS dead. Activists, who backed the proposal, howled in protest. On Monday the White House waffled as the law’s supporters heaped criticism on President Obama for breaking a promise.
We suspect political positioning or constituency clamoring won’t change the reality that CLASS is simply a nonstarter, as HHS acknowledged.
The nonpartisan Congressional Budget Office on Monday procedurally cleared the way for repeal of CLASS. The White House rejected that step, prompting supporters and opponents to say the administration wants it both ways. Bills to rescind the law are pending in the House and Senate, but the president said he may veto them.
The CLASS act was supposed to be a financially workable aspect of Obamacare, collecting premiums from participants for five years before paying benefits, enabling the administration in 2010 to claim CLASS would reduce the federal deficit by $86 billion. That ephemeral savings now officially has disappeared.
CLASS was one of many gimmicks to make the Patient Protection and Affordable Care Act appear fiscally sound. Instead, it is revealed as fundamentally flawed. Similarly, the administration claims the new law will reduce costs. But the CBO already estimates as many as 10 million employees will lose health coverage when employers drop insurance after the law becomes fully effective beginning in 2014. Other estimates are much higher.
Without CLASS’ presumed profitability, the CBO will be pressured to rework overall Obamacare numbers. That should give congressional opponents more arguments for repeal. Obamacare also faces the possibility of the Supreme Court declaring it unconstitutional during the run-up to next year’s presidential election.