Fiscal Cliff Deal Cancels CLASS


Those hunting for a bit of good news in the fiscal cliff deal can look to a provision repealing a long-term care program attached to ObamaCare.

When the health law first passed, it included a $70 billion entitlement known as the CLASS Act. The Community Living Assistance Service and Supports Act was supposed to be a self-sustaining program that provided cash benefits intended to help finance long-term care. It was an optional program that workers could buy into at regulated rates that weren't allowed to take health history into account. The program was even supposed to reduce the deficit: It accounted for about half of ObamaCare's scored deficit reduction.

But after the law passed, further analyses warned that instead of a self-financing, deficit reducing benefit program, CLASS would instead be a fiscal disaster, unable to self-finance and resulting in a long-term increase in the deficit and sky-high premiums for many beneficiaries, according to researchers at Boston College. Eventually, even the Obama administration had to admit that it wouldn't work. "While the law outlined a framework for the CLASS Act," Health and Human Services Secretary Kathleen Sebelius told members of Congress in February, 2011, "we determined pretty quickly that it would not meet the requirement that the act be self-sustaining and not rely on taxpayer assistance."

And so the administration closed the program. But it stayed on the books, which meant that, at least in theory, it could someday be revived.

No more: The fiscal cliff deal that passed in the House on Tuesday struck CLASS from the books for good. Which means that unless Congress passes new legislation, the program isn't coming back. Given its dormant status, CLASS wasn't likely to do much damage. But there were those who seemed interested in reviving the program — and attempting to "fix" its problems by making buy-in mandatory. Repeal takes that possibility off the table.