By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    back pain
    No More Aches! A Guide To Effective Back Pain Relief
    March 28, 2024
    workplace first aid
    First Aid Training Can Improve Workplace Health & Safety
    June 27, 2024
    U.S. Drug Shortage Crisis Creates Greater Health Risks
    September 4, 2024
    Latest News
    How Probate Planning Shapes the Future of Your Estate and Family Care
    July 17, 2025
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
    The Wide-Ranging Benefits of Magnesium Supplements
    June 11, 2025
    The Best Home Remedies for Migraines
    June 5, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    2/365 teenage pregnancy
    Make IUDs and Implants More Affordable and Accessible for Teens
    September 25, 2012
    Health Insurance Coverage for Legal Immigrants in Massachusetts: Doing the Right Thing and the Smart Thing
    January 7, 2012
    Image
    Terminating the Doctor-Patient Relationship …
    December 21, 2012
    Latest News
    How IT and Marketing Teams Can Collaborate to Protect Patient Trust
    July 17, 2025
    How Health Choices and Legal Actions Intersect After an Injury
    July 17, 2025
    How communities and healthcare providers can address slip and fall injuries with legal awareness
    July 17, 2025
    Let Your Lawyer Handle the Work Before You Pay Medical Costs
    July 6, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: CLASS Act: An $86 Billion Puzzle
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Policy & Law > CLASS Act: An $86 Billion Puzzle
Policy & Law

CLASS Act: An $86 Billion Puzzle

JohnCGoodman
JohnCGoodman
Share
5 Min Read
SHARE

In a late Friday “data dump,” the U.S. Secretary of Health & Human Services, Kathleen Sebelius, announced that the long-term-care program established under ObamaCare, the Community Living Assistance Services and Supports (CLASS) program, would not come into effect.

In a late Friday “data dump,” the U.S. Secretary of Health & Human Services, Kathleen Sebelius, announced that the long-term-care program established under ObamaCare, the Community Living Assistance Services and Supports (CLASS) program, would not come into effect.

This humiliating reversal was expected. Late September, the U.S. Department of Health & Human Services turned the lights out at the CLASS offices and reassigned the staff. It has long been understood that CLASS was impossible. It was a voluntary long-term-care program with skimpy benefits ($50 per day), a five-year vesting period before an enrollee could claim benefits, and a rule that healthy and sick people had to be charged the same premium.

 

More Read

physician wellness
Physician Wellness: Why It’s Such a Struggle
Choosing a Provider, Ethics, and Playing Darts Blindfolded
Medical Device Tax Costs 1,000 Jobs
4 Car Accident Injury Tips To Get The Compensation You Deserve
Bipartisan Cooperation on Medicare: I’m Getting More Optimistic

The Chief Actuary of the Centers for Medicare & Medicaid services (CMS) initially estimated that monthly premia would average about $240 per month. As he wrote in his analysis of April 22, 2010: “In general, voluntary, unsubsidized, and non-underwritten insurance programs such as CLASS face a significant risk of failure as a result of adverse selection by participants” (p. 15). The Chief Actuary expressed considerable doubt that the program could be demonstrated actuarially sound through 75 years, as the law requires.

But this was not the political purpose of CLASS. The purpose was simply for the federal government to start receiving premium income as early as 2011, while not paying benefits until 2016. Instead of investing the premiums like a real insurer, the government would count the premia against the rest of ObamaCare, which suffers significant negative cashflow starting in 2014. The Chief Actuary estimated that CLASS would bring the federal government a windfall of $38 billion dollars for the first decade of ObamaCare, 2010 through 2019.

The Congressional Budget Office (CBO) was also optimistic about CLASS’ magical ability to fund ObamaCare. In a letter dated November 25, 2009 (four months before the legislation was signed), the CBO estimated that the House of Representative’s version of ObamaCare would earn $72 billion in the first ten years from CLASS, and $102 billion from the House of Representatives’ version (p. 350). In testimony dated March 30, 2011, the CBO Director confirmed his office’s estimate that CLASS would reduce the federal deficit by $86 billion in the next decade, 2012 through 2021 (p. 25). The same testimony reported that ObamaCare overall would reduce the federal deficit by $210 billion over the period (p. 12).

So, by dumping CLASS, the Administration has just erased over 40 percent of ObamaCare’s presumed deficit-reducing achievement. This is not to say that the CBO’s figures are reliable. It is well known that some of the cuts to Medicare incorporated in the legislation – especially slashing physicians’ fees – are politically impossible in the short and intermediate term. Furthermore, the CBO dramatically underestimates the number of people who will be seeking refundable tax credits to get health insurance in Health Benefits Exchanges.

Nevertheless, the administrative detonation of CLASS completely explodes Congress’ own budgetary score-keeping. Congressional Republicans are now moving to repeal the CLASS program; and the CBO has announced that it will give a zero budgetary score to such a repeal. This would make it easier for Republicans to support, because it would not increase the deficit score. Nevertheless, it makes no sense. If CLASS was going to reduce deficits by $86 billion, the repeal of CLASS muse increase deficits by same $86 billion.

Secretary Sebelius needs to announce where she plans to find this (now erased) $86 billion. If Republicans want to repeal CLASS immediately, but also keep up the pressure for full repeal of ObamaCare, they should not let her off the hook.

 

   

TAGGED:CLASS ActHHSlong-term care
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

Grounded Healing: A Natural Ally for Sustainable Healthcare Systems
How IT and Marketing Teams Can Collaborate to Protect Patient Trust
Global Healthcare Policy & Law
July 17, 2025
paramedics in surgical gloves and masks
How Health Choices and Legal Actions Intersect After an Injury
Health care
July 16, 2025
a woman giving a key
How Probate Planning Shapes the Future of Your Estate and Family Care
Health
July 16, 2025
a woman with kinesio tapes on her back arm
How communities and healthcare providers can address slip and fall injuries with legal awareness
Health care
July 16, 2025

You Might also Like

The Happy Advantage – Shawn Achor Video [Amazing]

February 16, 2012
Image
eHealthHealth ReformTechnology

Dealing with the Growing Power of “Medical Googlers”

November 8, 2012
doctors and eHealth
eHealthMedical EducationSocial Media

Can Cloud-Based Doctors’ “Lounges” Help Keep Your Fund of Knowledge Current?

April 22, 2014

Do Republican Presidential Candidates Have any Good Ideas on Health Care?

August 30, 2011
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?