Republicans Say Obama Administration Ignored Warnings on CLASS Act
Government experts continually warned that the Community Living Assistance Services and Supports Act -- a long-term care insurance program created by the federal health reform law -- is financially unsustainable, even as leading Democrats said otherwise, according to e-mails and documents disclosed on Wednesday, the AP/Washington Post reports.
Republican lawmakers -- who on Thursday are expected to release a report on the CLASS Act -- unveiled the communications as part of an effort to repeal the program (Alonso-Zaldivar, AP/Washington Post, 9/14).
Background on CLASS Act
The CLASS Act would provide insurance to workers if they become unable to care for themselves because of injury or illness. Workers must pay into the program for five years before they can qualify for benefits
Critics have questioned the CLASS Act's fiscal sustainability and criticized it as an "accounting gimmick." They note that the program collects money only during the 10-year window CBO used to estimate the cost of the health reform law. HHS officials have acknowledged concerns about the CLASS program and are considering changes to ensure its long-term fiscal health (California Healthline, 8/26).
Republican Repeal Efforts
However, the documents unveiled by the GOP show a pattern of continual warnings about the CLASS program long before the health reform law was enacted. They date back to:
- May 2009, when CMS Chief Actuary Richard Foster issued the first warning about the CLASS Act. Foster wrote, "At first glance this proposal doesn't look workable," adding that the program would have to enroll more than 230 million individuals to be financially feasible;
- July 2009, when Foster reiterated his concerns, saying that "Thirty-six years of (professional) experience lead me to believe that this program would collapse in short order and require significant federal subsidies to continue";
- October 2009, when Obama administration senior aging policy official William Marton outlined concerns that large numbers of healthy individuals would not sign up for the program, which could destabilize the program and create high premiums for a small group of sicker beneficiaries. "Seems like a recipe for disaster to me," Marton wrote;
- November 2009, when Foster went public with his concerns;
- December 2009, when presentations for senior administration officials showed that the program ultimately would be financially robust, but internal communications between administration officials outlined concerns about the program; and
- January 2010, when administration officials released a 10-page list of "technical corrections." Republicans say none of those changes were implemented.
Despite the warnings, work on the program continued. The program gained momentum after an AARP report outlined scenarios for implementing the plan, even though the study raised financial concerns.
The documents show that Foster eventually was "edged out" of discussions on the program, according to AP/Post. Meanwhile, administration officials relied on a more favorable analysis of the program from the Congressional Budget Office.
HHS spokesperson Richard Sorian on Wednesday said that the agency has not made a decision yet on the future of the CLASS program. He said, "We are continuing our analysis. But it's an open question. The question is whether we can develop a program that is fiscally solvent and self-sustaining into the future."
Sorian reiterated that HHS Secretary Kathleen Sebelius will not go forward with the program until it is financially sustainable.
Many Republicans still are not convinced, according to the AP/Post. Rep. Fred Upton (R-Mich.) said, "The CLASS program is fiscally unsound and was used as a budget gimmick in the health care law" (AP/Washington Post, 9/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.