Just days after declaring its proposed long-term care program too expensive to implement, the Obama administration on Monday insisted that it would fight any Republican efforts to repeal the program that was a key component of the president’s sweeping health care reforms.
The Community Living Assistance Services and Supports program, or Class Act, was to provide long-term care insurance for aging workers and would have been financed through workers’ voluntary contributions. After 19 months of trying to implement the program, Health and Human Services Secretary Kathleen Sebelius said Friday that she was dropping the program because there was no way to make it work financially.
“Despite our best analytical efforts,” Sebelius said, “I do not see a viable path forward for Class implementation at this time.”
The Congressional Budget Office on Monday announced that the Class Act could be repealed without adding to the nation’s budget deficit. But just as congressional Republicans were jumping on that news, the White House announced that it would fight any attempts to repeal the program even though it acknowledges the program won’t work.
Republican opponents of President Obama’s health care reforms hailed Sebelius’ admission as evidence that Obama had misstated the financial savings used to justify the health care reform package. The Class Act was supposed to save $86 billion between 2012 and 2021, about 40 percent of all savings promised for the entire package.
“The Class Act was a budget gimmick that might enhance the numbers on a Washington bureaucrat’s spreadsheet but was destined to fail in the real world,” said Senate Minority Leader Mitch McConnell, R-Ky. “We should repeal the Class Act and the rest of the health spending law and replace it with the type of common-sense reforms that lower costs and Americans support.”
The Class Act would have allowed workers to pay a monthly premium during their careers. If they later became disabled, the workers could collect a daily cash benefit of at least $50 to pay for nursing services or other care.
But Sebelius’ staff determined that the proposed program was fundamentally flawed. It required that a large number of healthy workers sign up and contribute during their working years. If they didn’t, premiums driven by the needs of disabled beneficiaries would destabilize the program and possibly require a taxpayer bailout.
Wallace Thies, a politics professor at Catholic University, said the failure of the long-term care program is a major blow to Obama’s proposed reforms.
“This gives Republicans an opportunity to argue that the whole Affordable Care Act was ill-conceived from the start,” Thies said. “Now the president, by admitting there were problems, is in part jettisoning his signature legislation.”
But William A. Galston, a former adviser to President Clinton, said the failure of the Class Act, which relied on voluntary contributions, could help justify a more crucial element of the health care reforms: the individual mandate that requires Americans to buy health insurance. That mandate is at the heart of several lawsuits brought by Virginia and other states challenging the constitutionality of the entire law.
“The Class Act was voluntary. There was a real risk that people would delay entry to the act until they need it,” Galston said. “This just strengthens the case for the current structure of health care reform.”
