Late Friday afternoon, the Obama administration announced that it had decided to terminate a significant component of the 2010 health-care reform law, ending a program to offer Americans insurance for long-term care because it was too costly to be viable.
Known as the Community Living Assistance Services (CLASS) Act, the program was to be voluntary and open to all working Americans. It would have provided a lifetime benefit of a least $50 a day in the event of disability, to help cover the costs of long-term care.
According to the Obama Administration the problem with the program stems from the fact that it was to be entirely financed by the premiums participants paid into the system. When the Administration began designing CLASS, they found that in order to provide a benefits package generous enough to meet the law’s requirements, they would have had to set premiums so high that few healthy people would actually enroll. Without a large pool of people paying into the program, the plan would have become even more expensive, forcing premiums even higher to the point of the program’s failure.
Kathy Greenlee, Assistant Secretary for Aging at the Department of Health and Human Services, stated directly: “At this point, we do not have a viable path forward to implement the CLASS Act.”
Republicans in Congress reacted to the news by saying that this proved that the health care law, known as the Patient Protection and Affordable Care Act (PPACA), should be repealed. Representative Phil Gingrey (R-GA), a member of the Energy and Commerce Committee said the finding was long overdue, adding, “I feel justified and vindicated... the bottom line is as people start to understand this bill, you are going to see more and more of a domino effect.”