Dem lawmakers to fight for CLASS health program’s survival

Congressional champions of the health law’s controversial CLASS Act said they’ll do all they can to keep it alive after reports Thursday that the Obama administration is putting the long-term care program on ice.

The Department of Health and Human Services recently asked Senate appropriators to strike $120 million that had been planned next fiscal year to implement the benefit for disabled Americans. And this past week, the administration was left scrambling to reassure advocates after the program’s departing actuary said the CLASS Act office was closing down.

{mosads}”It’s sad,” said Sen. Barbara Mikulski (D-Md.), a champion of the program that was developed in her Senate HELP Committee by the late Sen. Edward Kennedy (D-Mass.). “We’re evaluating our strategy now.”

Rep. Frank Pallone (D-N.J.), who sponsored the program in the House, said terminating the program would be a “huge mistake.”

“Obviously the administration has put some kind of hold on it,” he told The Hill. “I’m going to try to find out why, but beyond that I’m going to continue to press them to implement it as soon as possible because it makes sense.”

HHS denied in a statement that the office was being closed, but acknowledged that the administration is taking a good hard look at the program even as it pares down the staff working on it.

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“We are continuing our analysis of this program,” the statement said. “As we have said in the past, it is an open question whether the program will be implemented. A CLASS program will only be implemented if it is fiscally solvent, self-sustaining and consistent with the statute.”

Not all Democrats are upset by the administration’s pause.

Sen. Kent Conrad (D-N.D.), who has called CLASS a “Ponzi scheme of the first order,” said the administration likely won’t be able to make the program work.

“Every bipartisan group that’s come back with a recommendation has said the CLASS Act is not sustainable,” he said. “So that should be a pretty clear signal.”

Still, Conrad didn’t cheer the news.

“There’s nothing happy about it,” he told The Hill. “It’s unfortunate because it tries to address a real need. The problem is what was put in place doesn’t work, it doesn’t add up.”

The CLASS Act is a form of long-term care insurance in which beneficiaries who pay monthly premiums for at least five years can get daily payments to help them with their daily living activities if they become disabled.

Medicare does not cover long-term care, and only about 8 percent of Americans have private insurance. As a result, many seniors end up having to divest themselves of their assets to become eligible for Medicaid, placing an unsustainable strain on the program for low-income Americans.

Advocates say the administration has the authority to set premiums and otherwise design the program so that it’s sustainable. They point out that the program’s departing actuary, Bob Yee, has himself denied that the program will become a burden on taxpayers – if it can be made to work.

“In my opinion, the CLASS Act will unlikely be designed such that it becomes an entitlement program eventually,” Yee told Forbes. “The statute clearly states that it is a voluntary insurance program. The actuarial oversight required – as evidenced in a number of the provisions in the Act – protects the program from a poor design.”

Advocates say that even without the $120 million appropriation next year, the administration can continue working on the program by using money from the health reform law. They said they expect the administration to still follow the timeline outlined by HHS in its initial funding request for FY 2012, which includes:

• Setting up an IT system for the program;
• Launching an education and information campaign to get people enrolled; and
• Creating two advisory councils and a board of trustees for the program.

Advocates for people with disabilities “are very strong on the point that they think this is a good model and they’re willing to do whatever it takes to make the model work and they’re not going to stop until there’s something on the table that … works for these folks,” said one advocate who’s closely involved with the program. “The question for me is: Is the administration going to still support what needs to happen to make this program work? We will hold them accountable to that.”

{mossecondads}Others are blaming Republicans’ fiscal intransigence for forcing the administration to cut funding for the program.

HHS officials “are being as supportive as they can be under the circumstances in which the Republicans have forced this,” said Rep. Henry Waxman (D-Calif.), the top Democrat on the Energy and Commerce Committee.

Asked if he thought this was the “end of the road” for the program, he answered “I don’t know.”

“I hope not,” Waxman said. “But we’ll see.”

He called the CLASS Act a “noble attempt” to address the nation’s lack of a long-term care program and said its demise would “leave the issue still very much in play.”

Conrad said he wasn’t optimistic that the void will be filled any time soon.

“In this environment, I don’t think there’s any momentum for something new,” he said. “But there is a real need.”