Fix Health Care Policy

Fiscal Cliff Deal Undoes Part of Obamacare

Though the government’s entitlement spending is still spiraling out of control, taxpayers have finally caught a break: The recently passed “fiscal cliff” deal included the repeal of one of Obamacare’s worst provisions, the Community Living Assistance Services and Supports (CLASS) Act.

The CLASS Act was a new entitlement program included in Obamacare. CLASS was created as a voluntary, government-run long-term care (LTC) program. It was supposed to be fully funded from the premiums paid by its beneficiaries and require no federal taxpayer dollars.

But the program was so poorly designed—much like the rest of Obamacare—that even the Obama Administration had to admit it wouldn’t work. A letter to Congress in 2011 from a CLASS administrator warned of extreme adverse selection in the program, stating that “if healthy purchasers are not attracted to the CLASS benefit package, then premiums will increase, which will make it even more unattractive to purchasers who could also obtain policies in the private market. This imbalance in the beneficiary pool would cause the program to quickly collapse.”

Many experts warned that the program would require either a mandate to participate or a permanent taxpayer bailout.

Read the rest on The Foundry…

Tags: CLASS Act, deal, fiscal cliff, ObamaCare, poorly designed, taxpayer dollars