CLASS Dismissed?


Not feeling CLASSy.

Is the Obama administration giving up on the CLASS Act—a fiscally unsound long-term care benefit program attached to ObamaCare—in the wake of revelations that Democrats passed it even after government actuaries warned that it was likely to be "a disaster"? From the looks of things, the administration is all but giving up on the program—they just don't want to admit it quite yet.

Shortly before noon, a Republican aide sent around quotes from an email written by Bob Yee, the top actuary for the CLASS (Community Living Assistance Service and Supports) Act, in which Yee claimed that he would be stepping down from his position because the Department of Health and Human Services (HHS) "has decided to close down the CLASS Office effective tomorrow."

But according to National Journal, HHS is saying otherwise.

"While the staff of the CLASS office has been reduced, reports that the CLASS office is closing are not accurate," HHS said in a statement. "We are continuing our analysis of this program. As we have said in the past, it is an open question whether the program will be implemented. A CLASS program will only be implemented if it is fiscally solvent, self-sustaining, and consistent with the statute."

Yee, on the other hand, has shrugged this off as spin:

Yee confirmed he wrote the letter. "I don't think that's the official line. But that's my interpretation. All of the people are being reassigned," Yee told National Journal.

So the office isn't technically closing and some sort of as-yet-unrevealed "analysis" of the program will supposedly continue. How much analysis can they really be doing without the program's chief actuary?

Funding may be a problem as well: According to National Journal health reporter Meghan McCarthy, the bill passed by Senate appropriations last night contained no money for CLASS.

CLASS has been a headache for the Obama administration since ObamaCare passed. It's also Exhibit A in why promises about the ObamaCare's fiscal soundness can't be trusted.

CLASS backers offered assurances that the program would pay for itself, and pointed to Congressional Budget Office scores showing it would reduce the federal deficit over the next 10 years. But independent analysis made it clear that the program would add to the deficit in the long term. 

Earlier this year, HHS Secretary Kathleen Sebelius finally admitted to Congress that, after the law passed, "we determined pretty quickly that it would not meet the requirement that the act be self-sustaining and not rely on taxpayer assistance."

She tried to reassure legislators, however, that she had the power to revise the program's structure in order to make it sustainable. But those assurances were undercut by the revelation that HHS had quietly been working on a legislative fix designed to grant Sebelius authority she lacked to overhaul the program.

Even worse, emails between Medicare actuaries and Democratic staffers working on CLASS revealed that Democrats were warned well in advance of ObamaCare's passage that the program's finances were destined for disaster—and yet they passed it anyway.

It's safe to presume that the Obama administration doesn't want to be seen as having lost to Republican attacks on a big part of ObamaCare. But it's also hard to see how HHS could go forward with the program, especially since the most plausible option to "fix" its actuarial failings seems to be making participation mandatory—which is why today's "only mostly dead" routine looks an awful lot like an attempt to shutter the program without actually admitting that they killed it.