Last February, Health and Human Services Secretary Kathleen Sebelius told the Senate that the CLASS Act, as written, was "totally unsustainable." In October, Sebelius announced that she could not implement the act and suspended the program. Even with the help of the best experts, her department could not design an actuarially sound and financially solvent plan.
Problem: Even though Sebelius said that the plan is unworkable, President Barack Obama doesn't support repealing the law.
On Wednesday, the House voted 267-159 -- 28 Democrats joined all 239 Republicans -- to pull the plug on the program. But the White House and Senate Majority Leader Harry Reid do not want to repeal the CLASS Act. They apparently think they can score political points by hanging on to a comatose program.
The sorry fact is that Congress never should have passed the CLASS Act. The late Sen. Ted Kennedy, D-Mass., long had championed a voluntary plan that would allow seniors to receive federally subsidized long-term care without spending down their assets in order to qualify for Medicaid. So Democrats slipped CLASS into the Affordable Care Act, also known as Obamacare. Then they patted themselves on the back for being the only people who really care about seniors.
It's a shame they didn't care enough to draft a realistic plan. Richard S. Foster, the chief actuary for Medicare and Medicaid, warned lawmakers that the program faces "a very significant risk of failure." The fiscal watchdog Concord Coalition called it a poorly designed "gimmick." Sen. Kent Conrad, D-N.D., called it "a Ponzi scheme of the first order." Sen. Ben Nelson, D-Neb., warned that CLASS would be "financially upside-down in a very short period of time."
Because the CLASS Act promised to pay for not only institutional care but also a "panoply of desirable home-care benefits," the Concord Coalition warned that the program essentially invited "induced demand -- or what is sometimes called the 'out of the woodwork' phenomenon."
Then-Sen. Judd Gregg, R-N.H., inserted language into the bill that required the plan to be actuarially sound for 75 years. It was the Gregg amendment that drove the Sebelius announcement.
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