On Friday, the Obama administration announced that it was abandoning the CLASS (Community Living Assistance Services and Supports) Act, because it was impossible to certify (as was required by law) that this aspect of Obamacare is financially sound. Now, in a surprise turn, the Hill reports, “President Obama is against repealing the health law’s long-term care CLASS Act and might veto Republican efforts to do so, an administration official tells The Hill, despite the government's announcement Friday that the program was dead in the water.”
The Hill continues,
“‘We do not support repeal,’ the official said Monday. ‘Repealing the CLASS Act isn’t necessary or productive.’…
“Over the weekend, The Hill has learned, an administration official called CLASS Act advocates to reassure them that Obama is still committed to making the program work. That official also told advocates that widespread media reports on the program’s demise were wrong, leaving advocates scratching their heads.”
The Hill adds, “Health and Human Services [HHS] Secretary Kathleen Sebelius announced Friday in a blog post on the liberal Huffington Post web site that the administration did not see a way to make the program sustainable.”
Nor was this publicly stated conclusion the result of a lack of determination on the administration’s part to salvage the program. Sebelius wrote (on Friday afternoon):
“While some analysts predicted that the CLASS program’s finances would be sustainable, others including the actuary for Medicare and Medicaid issued warnings to Congress and the public before the law was enacted that not enough young, healthy people would sign up. This could have led to a vicious cycle where premiums would have to be set higher and higher to cover the likely costs of benefits, leading fewer and fewer healthier people to sign up for the program. For this reason, the law required me to develop a benefit plan that, in addition to meeting other statutory requirements, would also be solvent for at least 75 years.
“Since then, our department has worked steadily to find a financially sustainable model for CLASS. Over the last 19 months, we’ve examined the long-term care market, modeled possible plan designs, and studied the CLASS statute, consulting at every step of the way with outside actuaries, insurers, and consumer groups.
“When it became clear that most basic benefit plans wouldn’t work, we looked at other possibilities….[W]e cast as wide a net as possible in searching for a model that could succeed.”
Sebelius then refers to a 46-page report released by her department. The last sentence of that exhaustive report reads: “We cannot with any confidence predict that the CLASS program would be able to honor its commitments to individuals who had already enrolled or entered beneficiary status in the program, or avoid leaving them worse off, or that such individuals would be able to recoup their paid premiums.”
Facing up to the inevitable, on Friday HHS pulled the plug on the program.
But Obama apparently isn’t yet willing to say his final farewells to CLASS. This from a president who likes to position himself rhetorically as a practical problem solver, someone who is above partisanship and isn’t captive to any given ideology but is simply committed to “what works.” Perhaps Obama’s reluctance to cede to his administration’s determinations is rooted in the fact that, unless his administration can find a way to resuscitate the CLASS Act, the vast majority of Obamacare would be easier to repeal via reconciliation — the previously obscure legislative vehicle that the Democrats used to pass it. As Avik Roy writes, “This is huge for the effort to repeal Obamacare via reconciliation.”
Republicans should now push forward with legislation to repeal the CLASS Act, via the traditional legislative process. (As Roy notes, 11 current Democratic senators have previously voted to eliminate it.) And while they’re at it, the GOP should also advance legislation to repeal Obamacare’s frightening Independent Payment Advisory Board (IPAB).
In general (as I’ve written previously), partial repeal legislation is dangerous and should be avoided — Obamacare was passed as “comprehensive legislation,” and it needs to be repealed comprehensively. But sweeping away the residue of the CLASS Act is a no brainer, and the NICE-like nature of the IPAB hasn’t yet gotten nearly enough public attention. The more Obama is forced to defend the indefensible IPAB, and the more he stubbornly chooses to defend to the CLASS Act in the face of fiscal reality, the better.