WASHINGTON — The Obama administration's signature health overhaul law, under relentless assault by Republicans, has suffered its first major casualty — a long-term care insurance plan.
The program, expected to launch in 2012, had been dogged from the beginning by doubts over its financial solvency.
Proponents, including many groups that fought to pass the health care law, have vowed a vigorous effort to rescue the program, insisting that Congress gave the administration broad authority to make changes. Long-term care includes not only nursing homes, but such services as home health aides for disabled people.
And more:
Known as CLASS, the Community Living Assistance Services and Supports program was a long-standing priority of the late Sen. Edward M. Kennedy, D-Mass.
Although sponsored by the government, it was supposed to function as a self-sustaining voluntary insurance plan, open to working adults regardless of age or health. Workers would pay an affordable monthly premium during their careers and could collect a modest daily cash benefit of at least $50 if they became disabled later in life. The money could go for services at home or to help with nursing home bills.
But a central design flaw dogged CLASS. Unless large numbers of healthy people willingly sign up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it, eventually requiring a taxpayer bailout.
After months insisting that could be fixed, Health and Human Services Secretary Kathleen Sebelius finally acknowledged Friday she doesn't see how.
"Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time," Sebelius said in a letter to congressional leaders.
It's amazing that this act, known as CLASS, was, from the beginning, never financially solvent.
Here is Andrew Sullivan from NRO with more on the budgetary shenanigans behind the CLASS Act:
What kind of depraved accounting scheme lets Congress enact into law a program that literally cannot sustain itself from the get-go? A program that the CBO, in accordance with an absurdly flexible set of budgetary rules, scored as deficit-reducing! Not only that, but the 10-year’s worth of CLASS Act premiums accounted for nearly half ($70 billion out of $143 billion) of the overall “savings” in Obamacare. In fact, the law might well have never passed without them, as they were included to give the (false) appearance of fiscal sanity.
The CLASS Act was supposed to bring in a savings of $53.6 billion over five years. Now, with the phony numbers out of the way, an additional $53.6 billion will be needed in order to cover the cost of Obamacare for the first six years.
Withe the looming Supreme Court decision on the constitutionality of the individual mandate due next summer, Obamacare looks to be desperately trying to stay afloat with no avail.
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