Obama administration drops long-term health care program…

The Obama administration is dropping a long-term care insurance program that was part of the health care law passed in 2010 due to cost concerns.

The Community Living Assistance Services and Supports program was canceled by Health and Human Services Secretary Kathleen Sebelius after trying for the past 19 months to make it financially viable.

In a letter to Congress, Sebelius wrote, “Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time.”

CLASS was similar to long-term plans available in the private sector. Workers sign up and pay a monthly premium. It was was voluntary and was supposed to be paid for entirely by the premiums of those who signed on. Subscribers would get a daily benefit.

A senior administration official told CNN there were questions whether CLASS could be self-sustaining even when the health care reform law was being considered by Congress.

In a blog entry on Healthcare.gov, Sebelius cited warnings that not enough young healthy people would sign up.

“This could have led to a vicious cycle where premiums would have to be set higher and higher to cover the likely costs of benefits, leading fewer and fewer healthier people to sign up for the program,” she wrote.

Sebelius said she wasn’t giving up.

“So even as we suspend work on implementing CLASS, we are recommitting ourselves to the ultimate goal of making sure Americans can get the long-term care they need, whether it’s a working-age mom with disabilities who needs daily support right now or a young man at his first job who wants to protect himself and his family against the possibility of huge long-term care costs in the future,” Sebelius wrote.

Responding to the Sebelius decision, Senate Republican leader Mitch McConnell said in a statement, “The Obama administration today acknowledged 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.”

McConnell said the CLASS Act “is only one of the unwise, unsustainable components of an unwise, unsustainable law.”

“We should repeal the CLASS Act and the rest of the health spending law and replace it with the type of common-sense reforms that lower costs and Americans support,” McConnell said.


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