Obamacare

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

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Put your hands in the air, cause we don't really care…

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