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October 14, 2011 |
U.S. Won’t Start Long-Term Care Insurance |
(Bloomberg News) The U.S. won’t introduce a long-term medical and disability care insurance program ordered under the 2010 health law because it isn’t fiscally viable, said Health and Human Services Secretary Kathleen Sebelius.
HHS will suspend work on the so-called Class Act that Republicans have opposed, she said in a statement today.
“I do not see a viable path forward for Class implementation at this time,” according to Sebelius’s statement on the HHS website.
Democrats who designed the Class program, led by deceased Senator Edward Kennedy of Massachusetts, intended it as a federal long-term care insurance plan for people disabled by illness or accident. By paying premiums while they were employed, beneficiaries would be eligible after five years for a stipend of at least $50 a day for health and support services at home.
Advocates for the program said it can be salvaged.
“Where our position has been and continues to be is that they have the authority to move forward and twist this Rubik’s Cube until a solution pops up,” Connie Garner, executive director of AdvanceCLASS, said in a phone interview. Her group represents nursing homes, disability organizations and seniors’ lobby AARP in pushing for the program’s implementation.
Needed Changes
The government may make 95 percent of the necessary changes to the program without congressional action, she said.
One Democrat, Senator Kent Conrad of North Dakota, described an early version of the program as a “Ponzi scheme.” He later supported the law that created it. Republicans, seizing on that statement, have derided Class as an unaffordable entitlement that would cost more than it took in from premiums.
The chief actuary for the U.S. Centers for Medicare and Medicaid Services, Richard Foster, backed those arguments in an April 2010 report, projecting that the program would cost the federal government more than it took in starting in 2025.
Because it is voluntary, Class faced a “problem of adverse selection,” in which only people who need the insurance, or think they will, would sign up.
Sebelius told a Senate Finance Committee hearing in February that Class “will not start unless we can be certain it will be solvent and self-sustaining into the future.”
A spokesman for her department, Richard Sorian, confirming last month that Class was on the ropes, said that “it is an open question whether the program will be implemented.”
Ending the program may add to the deficit. The Office of Management and Budget estimates that savings from the health law drop from $143 billion over 10 years to $127 billion without Class, said Kathy Greenlee, assistant secretary for aging in Sebelius’s department, in a conference call with reporters.
The Senate Appropriations Committee passed a fiscal 2012 spending bill for the health department on Sept. 21 that eliminated funding to enact Class, saying it wasn’t clear whether it would proceed. Obama had asked for $120 million for the program. |
U.S. Won’t Start Long-Term Care Insurance |
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