Democrats, determined to pass President Obama’s national health care law in 2009 and 2010, ignored repeated warnings from within the administration that one of the law’s new programs was financially unsustainable, according to emails obtained by the Associated Press ahead of a House GOP report due out Thursday.
The insolvency of the Community Living and Support Services Act (CLASS) has never been a big secret. During the health care debate, many people publicly expressed skepticism about the long-term care program that was originally the brainchild of former Sen. Ted Kennedy, D-MA.
The idea of the program was to collect premiums and then pay out benefits to cover home-based health care later, but every independent analysis, including from the Congressional Budget Office (CBO), said it would run up deficits over time.
Even Senate Budget Committee chairman Kent Conrad, D-ND, had called it “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of,” though he eventually voted for it anyway.
What’s new is that, according to AP, Obama administration officials were also privately raising alarms over the program, even as Obama dedicated his presidency to getting it across the finish line.
From the AP:
The emails show that the first warning about CLASS came in May 2009, from Richard Foster, head of long range economic forecasts for Medicare. “At first glance this proposal doesn’t look workable,” Foster wrote in an email to other HHS officials, some of whom were working with Congress to get CLASS into the health care law.
Foster said a rough outline of the program would have to enroll more than 230 million people — more than the U.S. workforce — to be financially feasible.
But work on CLASS continued, bolstered in part by a report for AARP that laid out scenarios for implementing the plan. The AARP study also raised financial concerns, although the seniors’ lobby supports CLASS.
In July, Foster tried again. After reviewing the latest information from Kennedy’s office, he wrote HHS officials: “Thirty-six years of (professional) experience lead me to believe that this program would collapse in short order and require significant federal subsidies to continue.”
Too late. The Obama administration had decided to support CLASS. In the months that followed, documents and emails indicate that Foster was edged out of deliberations. Officials relied on a more favorable analysis from the Congressional Budget Office. In November, Foster went public with his concerns.
What’s left out of the AP story is that Obama and congressional Democrats used CLASS as one of their accounting gimmicks to produce a health care bill that the CBO would score as reducing deficits. Though the program is projected to run deficits over time, because it is designed to collect premiums for years before offering benefits, Democrats were able to claim an additional $70 billion in deficit reduction over the CBO’s 10-year budget window.
