The CLASS act, a provision in the heath-care reform law included in the 2010 healthcare reform law that Republicans have derided as a budget trick is dead. U.S. health officials said that after 19 months of analysis, they could not come up with a model for the measure designed to help the disabled and elderly cash to receive care at home, could not be both voluntary and budget-neutral, say health officials.
“We do not have a path to move forward,” Kathy Greenlee, assistant secretary of aging from the Health and Human Services department and administrator of the program, said in a call with reporters. “Everything we do to make the program more (financially) sound moves us away from the law, and increases the legal risk of the program.”
The Community Living Assistance Services and Supports (CLASS) program was designed to give the disabled and elderly cash to receive care at home instead of usually more expensive institutional care. Under the law, workers would have begun enrolling in the program after October of 2012, after the HHS set the program’s benefits. The program was to have been voluntary, with participants required to pay into it for at least five years before qualifying for benefits.
The Congressional Budget Office had estimated the program would reduce the federal deficit by $70 billion in the program’s first decade. However, the CBO also said the program would start to lose money after the first decade or two, once benefit payments exceeded income from premiums.
Republicans, many of whom are eager to repeal Obama’s healthcare reform, have criticized the CLASS Act as a way to trump up the cost savings of the Affordable Care Act. “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,” said Senate Republican Leader Mitch McConnell. “However, it is worth remembering that the CLASS Act is only one of the unwise, unsustainable components of an unwise, unsustainable law.”
Greenlee said the Affordable Care Act will continue to reduce the deficit by $127 billion between 2012 and 2021, even without the CLASS Act. However, the decision to suspend the program would probably reduce the president’s 2013 baseline budget.
Dozens of states have sued to challenge the healthcare law, particularly its requirement that all Americans have health insurance. The Supreme Court is expected to rule on the legal challenge sometime before June 2012
In September, Republicans in Congress posted emails that showed government actuaries were already questioning CLASS, even before the program became part of the Affordable Care Act.
The Republican Policy Committee also posted a September email from Bob Yee, an HHS actuary who said he was hired to run the program, saying he was leaving his position and the CLASS office would be closing.
HHS Secretary Kathleen Sebelius in February acknowledged the agency was struggling to make the program self-sustainable in the long run. “Because of the tremendous uncertainty that surrounded the program from its inception, it had this provision that the (HHS) Secretary had to satisfy solvency, and we could not proceed otherwise,” she said.
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