Fix Health Care Policy

The House Energy and Commerce Subcommittee on Oversight and Investigation and Subcommittee on Health held a hearing last week on the future of the unsustainable, poorly designed CLASS program now that it’s on life support (though it still has a heartbeat). As Heritage analysts have already pointed out, there is a lot to look into in this flawed program.

CLASS was created as a voluntary, government-run long-term care insurance program. According to the legislation, it would be fully funded from the premiums paid by its beneficiaries, requiring no federal taxpayer dollars. But experts and Members of Congress from both sides of the aisle have long warned that the program wouldn’t work and would eventually cost taxpayers a pretty penny.

The Department of Health and Human Services (HHS) recently dropped a bombshell on Obamacare when it announced it will not be implementing the program. Their official report raised concerns about adverse selection in the program, pointing out 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.”  (Read the rest on The Foundry…)

Tags: CLASS, House Energy and Commerce Subcommittee on Oversight and Investigation, long-term care insurance, unsustainable

On Friday, Secretary of Health and Human Services Kathleen Sebelius admitted that the CLASS program can’t work. After months of insisting that it could meet a 75-year actuarial soundness test and keep with the statutory requirements, Sebelius acknowledged that “despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time.”

The CLASS Act was a key provision included to pass Obamacare. It would have established a new, government-run long-term-care insurance program. But it was also used to claim that the health care law was paid for and would help bring down the deficit. From the beginning, Heritage warned that it was poorly designed and was included in the legislation primarily as a budget gimmick.  (Read the rest on The Foundry…)

Tags: actuarially sound, budgeting gimmick, CLASS Act, HHS Secretary Kathleen Sebelius, long-term care insurance