CLASS Dismissed

ObamaCare cutback

ObamaCare's advocates bolstered their case by citing a Congressional Budget Office (CBO) analysis that said the health care law would reduce the federal budget deficit during the next decade by more than $130 billion. About $70 billion of that projected deficit reduction came from the Community Living Assistance Service and Support (CLASS) Act, a separate long-term care program that was attached to Patient Protection and Affordable Care Act. 

Supporters of CLASS, which collects premiums from beneficiaries who've enrolled in the program through their employer, promised it would be fiscally sustainable without any additional taxpayer assistance. Critics pointed out that the CBO deemed the program a deficit reducer only because it was designed to collect premiums for several years before paying out benefits. 

Eventually, even the Obama administration agreed. "We determined pretty quickly that [CLASS] would not meet the requirement that the act be self-sustaining and not rely on taxpayer assistance," Health and Human Services (HHS) Secretary Kathleen Sebelius told Congress in February. It turns out top Democrats were warned long before then. In September, House Republicans released documents showing that a Medicare actuary had told Democrats that CLASS "seems like a recipe for disaster" almost a year before the law was passed. 

HHS responded by firing the actuary, reassigning all CLASS staffers, and asking Congress to cut every dollar of planned funding for the program in the coming year. In October, HHS cancelled the program, with Sebelius saying implementation was not viable at this time. Despite opposing implementation, however, the administration still opposes repeal.