The Obama Administration notified Congress today that the CLASS Act — Obamacare’s long-term care insurance plan — is unable to go forward due to critical design flaws that make the program unsustainable.
In a letter to Congress, Health and Human Services Secretary Kathleen Sebelius wrote that “Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time.” CBS News reports:
The law required the administration to certify that CLASS would remain financially solvent for 75 years before it could be put into place.
But officials said they discovered they could not make CLASS both affordable and financially solvent while keeping it a voluntary program open to virtually all workers, as the law also required.
Monthly premiums would have ranged from $235 to $391, even as high as $3,000 under some scenarios, the administration said. At those prices, healthy people were unlikely to sign up.
That CLASS was unsustainable isn’t news. Brian Blase and John S. Hoff explain that “CLASS was poorly designed, and actuaries criticized it as being unsustainable well before the passage of Obamacare.” And in September, emails released by congressional investigators revealed that proponents of CLASS pushed to include it in Obamacare despite warnings that it would require either a sizable federal bailout or another insurance mandate, as Heritage’s Lachlan Markay reported. Nevertheless, Sebelius insisted that her department could fulfill the law’s sustainability mandate–that is, until today.
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