Democrats Knew ObamaCare's CLASS Act Was a Fiscal Disaster. They Passed It Anyway.

Half of ObamaCare's supposed deficit reduction comes from the Community Living Assistance Service and Supports (CLASS) Act, a long-term care benefit tacked onto the bill and scored as reducing the deficit by about $70 billion over the next decade. But that's only because the law's authors gamed the Congressional Budget Office's scoring rules. The score counted premiums collected this decade as reducing the deficit despite the fact that they'll be needed to pay out benefits later. Even worse, the premiums won't be enough to pay for all of the benefits: In the long-term, the program isn't self-sustaining, and will actually add to the federal deficit. 

The Obama administration now admits this: Earlier this year, Health and Human Services Secretary Kathleen Sebelius told Congress that after ObamaCare's passage, “we determined pretty quickly that [CLASS] would not meet the requirement that the act be self-sustaining and not rely on taxpayer assistance.”

So it was all a big mistake, and ObamaCare's defenders just found out too late? Nope. They knew the program wasn't fiscally sound. And they lied about it.

Despite repeated promises that the program would be fiscally sustainable, Democratic backers of the CLASS Act were well aware that it wasn't months prior to the law's passage, according to the AP:

Even as leading Democrats offered assurances to the contrary, government experts repeatedly warned that a new long-term care insurance plan could go belly up, saddling taxpayers with another underfunded benefit program, according to emails disclosed by congressional investigators.

Part of President Barack Obama's health care law, the program is in limbo as a congressional debt panel searches for budget savings and behind the scenes, administration officials scramble to find a viable financing formula.

A longstanding priority of the late Sen. Edward M. Kennedy, D-Mass., the Community Living Assistance Services and Supports program, or CLASS, was spliced into the health care law despite nagging budget worries. Administration emails and documents reveal that alarms were sounded earlier and more widely than previously thought. Congressional Republicans seeking repeal of the program provided the materials to The Associated Press.

"Seems like a recipe for disaster to me," William Marton, a senior aging policy official in the administration, wrote in an October 2009 email. Marton explained his concern that large numbers of healthy people would not willingly sign up for CLASS, creating a predicament in which soaring premiums for a smaller group of frail beneficiaries would destabilize the program.

So Democratic staffers were told long before the law passed that CLASS was a mess, perhaps totally unworkable. They tacked it onto ObamaCare and took the deficit-reduction anyway. 

...The emails show that the first warning about CLASS came in May 2009, from Richard Foster, head of long range economic forecasts for Medicare. "At first glance this proposal doesn't look workable," Foster wrote in an email to other HHS officials, some of whom were working with Congress to get CLASS into the health care law.

Foster said a rough outline of the program would have to enroll more than 230 million people - more than the U.S. workforce - to be financially feasible.

Now, of course, HHS Secretary Sebelius says she's commited to fixing the program. But how do you get 230 million people to enroll in a voluntary program, especially when premiums are projected to fairly expensive? How about forcing individuals to enroll with yet another mandate? The administration appears willing to consider it: When Sebelius was presented with the idea of requiring enrollment, she declined to rule it out

I wrote about the CLASS disaster back in May

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    No! Obama wouldn't lie! Perish the thought.

  • ||

    I guess they had to pass the law so we could find out what was in it.

  • ||

    So sad that it's not even funny anymore. These people are craven lunatics.

  • Peter Suderman||

    They didn't have to pass this part of the law to find out what was in it -- they already knew!

  • cynical||

    He said "we".

  • Greer||

    We need some hope and change. Seriously, this guy wanted everyone to believe that he would bring a new tone to Washington, blah, blah, fucking blah.

    I thought it couldn't get worse than Clinton, guess what, Bush comes along. I thought it couldn't get worse than
    Bush, guess what, this idiot comes along. It cant' get worse, can it?

  • ||

    Don't despair! Someday, we really will hit rock bottom.

  • ||

    It can.

  • Rick Perry||

    I second that emotion.

  • ||

    I dunno. Perry would suck in a number of ways, but I doubt he'd try to drive a stake through the economy the way Obama and his friends have. . .repeatedly.

  • Colin||

    +1

  • fish||

    Tony|9.14.11 @ 11:59AM|#

    Yet you don't have a leg to stand on since all evidence in the world suggests that my scheme is the cheaper option per capita as well as being the most human.....

    Comedy gold..... Jerry....pure gold.

  • Greer||

    William Marton, a senior aging policy official in the administration,

    Did you know we had one of these?

  • ||

    I could have guessed it. Did you know the DOT is looking for an Associate Administrator for Administration?

    http://jobview.usajobs.gov/Get.....2+01:13:00

  • fish||

    Do you think working in the Department of Redundancy Department would be comparable?

  • fish||

    ....a senior aging policy official in the administration

    Senior: He's been there longest?

    Aging: Yes he is.

    Policy official: Overpaid yutz who goes to many pointless meetings and can't wait to retire.

  • Federal Dog||

    "HHS Secretary Sebelius says she's commited to fixing the program"

    How does such a painfully low-functioning bureaucrat imagine she is able to fix anything, much less this fiasco?

  • Copernicus||

    "When Sebelius was presented with the idea of requiring enrollment, she declined to rule it out. "

    It is so hard to reverse direction once one has taken even one step down a slippery slope.

  • Invisible Finger||

    Instead of being a wage slave, consider yourself an insurance premium slave.

  • Almanian||

    Stay CLASSy, governmentards

  • BakedPenguin||

    They sure love those cutesy acronyms, don't they? How about 'Communards Lifting Unlimited Services by Tactically Eliciting Riches From Unsuspecting Chumps'.

  • ||

    Even worse, the premiums won't be enough to pay for all of the benefits: In the long-term, the program isn't self-sustaining, and will actually add to the federal deficit.

    Imagine, if you can, the depth and breadth of my astonishment.

  • ||

    The executive branch can't possibly unilaterally add an individual mandate for that, can it? I mean, at this point I wouldn't be surprised about anything that was buried in the text of that legislative excretion, but that's a mite too far.

  • cynical||

    I don't know, can it unilaterally invade nations or unilaterally sell weapons to narcoterrorists or unilaterally grant waivers to law it doesn't like when granted the authority?

    The executive branch can do whatever it likes until someone stops them.

  • ||

    I knew it would be a fiscal disaster when Democrats wrote the bill. Stupidity, corruption, and blind faith in government is a bad combination.

  • ||

    Bend over, bitches.

  • Air Jordans 2011 Shoes||

    Here you can choose more new products, enjoy more discounts, so you get favorite products while saving money.

  • Obamacare rationing||

    CLASS was used to get Obamacare passed. Remember the democratic promises "the reform will reduce the deficit?" It never was. All they wanted was the law passed by hook or by crook. You actually see a pattern emerge where virtually every promise was a lie and actually the opposite of what is now going on. "You can keep your insurance if you like it."
    Since then millions have lost their coverage.
    "This will make healthcare more affordable" health insurance premiums have jumped 10% since the laws passage. They stole $530 million from medicare now that will go bk by 2016 (probably sooner) And on and on. Obamacare was born from fraud and in all 2000 pages you cannot find one reformative measure. Only government price fixing, control and redundancy.

    Doing nothing was infinitely better than doing the wrong thing with healthcare.

  • Nike Dunk High||

    thanks

  • Nike Dunk High||

    thanks

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement