Obama Administration Pulls the Plug on Long-Term Care Program

Oct 14, 2011 5:33pm

The Obama Administration threw in the towel Friday, acknowledging that a Long-Term Care provision in the health care law championed by the late Sen. Ted Kennedy, D-Mass., was financially unsustainable.

Secretary of the Department of Health and Human Services Kathleen Sebelius wrote a letter to Congress that a 19-month “comprehensive analysis” of the Community Living Assistance Services and Supports (CLASS) program indicated that it was not viable.

CLASS was a voluntary program where a taxpayer could say, “I may need long term care some day,” and volunteer to pay premiums that would allow the taxpayer to get that cash later in life. There were concerns about this program as it was being formed, so Sen. Judd Gregg, R-N.H., pushed a provision in the health care legislation saying HHS would need to certify that CLASS Act would be actuarially sound and financially solvent for 75 years before it could be implemented.

Today Sebelius acknowledged that she couldn’t make that certification.

“The challenge that CLASS was created to address is not going away,” she noted. “By 2020, we know that an estimated 15 million Americans will need some kind of long-term care and fewer than three percent have a long-term care policy….(L)eft unaddressed, long-term care costs to taxpayers will only increase. Without insurance coverage or the personal wealth to pay large sums in their later years, more Americans with disabilities will rely on Medicaid services once their assets are depleted, putting further strain on State and Federal budgets.”

Senate Minority Leader Mitch McConnell, R-Ky., said in a statement that the announcement essentially meant that the Obama administration was acknowledging “what they refused to admit when they passed their partisan health bill: the CLASS Act was a budget gimmick that might enhance the numbers on a Washington bureaucrat’s spreadsheet but was destined to fail in the real world.”

Joyce A. Rogers, Senior Vice President for Government Affairs at AARP, issued a statement saying that the powerful seniors organization was “disappointed that the Secretary has prematurely stated she does not see a path forward to properly implement CLASS. In fact, the CLASS actuarial report established that CLASS can still be designed to be a ‘value proposition,’ although development work still needs to be done. We urge the Administration to continue dialogue and development of a viable path forward. Medicare does not cover long-term care, and 70 percent of people age 65 and over will need long-term care services at some point in their lifetime.”

-Jake Tapper

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