WASHINGTON (AP) — The Obama administration’s signature health overhaul law, under relentless assault by Republicans, has suffered its first major casualty – a long-term care insurance plan.
The program, expected to launch in 2012, had been dogged from the beginning by doubts over its financial solvency.
Proponents, including many groups that fought to pass the health care law, have vowed a vigorous effort to rescue the program, insisting that Congress gave the administration broad authority to make changes. Long-term care includes not only nursing homes, but such services as home health aides for disabled people.
Known as CLASS, the Community Living Assistance Services and Supports program was a long-standing priority of the late Sen. Edward M. Kennedy, D-Mass.
Although sponsored by the government, it was supposed to function as a self-sustaining voluntary insurance plan, open to working adults regardless of age or health. Workers would pay an affordable monthly premium during their careers and could collect a modest daily cash benefit of at least $50 if they became disabled later in life. The money could go for services at home or to help with nursing home bills.
But a central design flaw dogged CLASS. Unless large numbers of healthy people willingly sign up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it, eventually requiring a taxpayer bailout.
After months insisting that could be fixed, Health and Human Services Secretary Kathleen Sebelius finally acknowledged Friday she doesn’t see how.
“Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time,” Sebelius said in a letter to congressional leaders.
The law required the administration to certify that CLASS would remain financially solvent for 75 years before it could be put into place.
But officials said they discovered they could not make CLASS both affordable and financially solvent while keeping it a voluntary program open to virtually all workers, as the law also required.
Monthly premiums would have ranged from $235 to $391, even as high as $3,000 under some scenarios, the administration said. At those prices, healthy people were unlikely to sign up. Suggested changes aimed at discouraging enrollment by people in poor health could have opened the program to court challenges, officials said.
“If healthy purchasers are not attracted … then premiums will increase, which will make it even more unattractive to purchasers who could also obtain policies in the private market,” Kathy Greenlee, the lead official on CLASS, said in a memo to Sebelius. That “would cause the program to quickly collapse.”
Gee, someone just discovered this? My how cluelessly ideological were they? 🙂
You mean government health care isn’t “free” or “cheap”. Gee, no one saw that coming… 🙂
That’s the same conclusion a top government expert reached in 2009. Nearly a year before the health care law passed, Richard Foster, head of long-range economic forecasts for Medicare, warned administration and congressional officials that CLASS would be unworkable. His warnings were disregarded, as President Barack Obama declared his support for adding the long-term care plan to his health care bill.
The demise of CLASS immediately touched off speculation about its impact on the federal budget. Although no premiums are likely to be collected, the program still counts as reducing the federal deficit by about $80 billion over the next 10 years. That’s because of a rule that would have required workers to pay in for at least five years before they could collect any benefits.
“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 of Kentucky.
Administration officials said Obama’s next budget would reflect the decision not to go forward. Even without CLASS premiums, they said the health care law will still reduce the deficit by more than $120 billion over 10 years.
Kennedy’s original idea was to give families some financial breathing room. Most families cannot afford to hire a home health aide for a frail elder, let alone pay nursing home bills. Care is usually provided by family members, often a spouse who may also have health problems.
“We’re disappointed that (Sebelius) has prematurely stated she does not see a path forward,” AARP, the seniors lobby, said in a statement. “The need for long-term care will only continue to grow.” (and we want to exploit them for it!)
Sebelius said the administration wants to work with Congress and supporters of the program to find a solution. But in a polarized political climate, it appears unlikely that CLASS can be salvaged. Congressional Republicans remain committed to its repeal.
As should we all. The government does need and we should not desire for them the power of life and death.
MORE UNFLATTERING NEWS:
The Treasury has recorded the second highest annual deficit in US history:
The government ran a $1.3 trillion deficit for the budget year that ended last month, the third straight year it has operated more than $1 trillion in the red. The 2011 budget deficit was the second highest on record. It’s slightly ahead of the previous budget year’s $1.29 trillion deficit but below the $1.41 trillion imbalance record in 2009. A decade ago, the government was running surpluses and trillion-dollar deficits seemed unimaginable. But those deficits now loom over tense negotiations in Washington.
But don’t worry, That’s Bush, The Republicans, and The Tea Party’s fault. They forced the Keynesian Economics of Socialist Democrats to do it!! 🙂
Billionaire Obama donor backer and major Solyndra investor, George Kaiser, has paid almost zero taxes over the last decade:
the Solyndra scandal is far from Kaiser’s first brush with political controversy. As the Sunlight Foundation’s Bill Allison reports today, Kaiser has become extraordinarily wealthy by taking advantage of the federal tax code in ways that some tax experts – including the IRS – believe to be illegal. As Allison describes it in his Sunlight post today, “in one six year period, during which he increased his net worth enough to land him on the Forbes list of the 400 wealthiest Americans, Kaiser reported taxable income to the Internal Revenue Service just once, totaling $11,699–equivalent to a full-time hourly wage of $5.62.” During the 1980s bust in the oil industry in Oklahoma and Texas, Kaiser bought up struggling energy companies whose losses provided him with tax deductions that effectively hid his own income.
The president prattles on endlessly about the rich paying “their fair share.” Perhaps he should lecture his own buddies first. Incidentally, during today’s Solyndra hearings on Capitol Hill, a veteran Treasury official admitted he’d never seen a federal loan structured in such a way that taxpayers are “subordinated” to private investors (as was the case with Solyndra, despite the recommendations of OMB, and after the company had already defaulted on the terms of the loan):
But don’t do as I do, do as I say! 🙂
Yet more stirring words of wisdom from the mindless hoardes.
DENVER — “We’re really tired of the government fucking everyone over,” one “Occupy Denver” protester told Daily Caller roving Colorado video reporter Kelly Maher this week.
“There’s a lot of stuff that needs to change,” our boy added, “and if it doesn’t, violent revolution will come.”
How to change things for the better? Apparently it just takes a box of bullets and some rope.
“If you get the thirteen families that own the world, including George Bush and his administration, get them in front of the White House and hang them and shoot them, because they deserve that.”
Talking to protesters, Forrest Gump might have said, is like a box of chocolates: You never know what sort of lunatic, homicidal flavor you’re going to get.
Now there’s one flavor I could do without.