Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced last Friday her recommendation to halt implementation of the Community Living Assistance Services and Supports (CLASS) Act. In letters to congressional leaders, Sebelius wrote that she does not see “a viable path forward for CLASS implementation at this time,” and recommends a halt to the program’s implementation efforts.
In a memo explaining HHS’s decision not to move forward with the program, Assistant Secretary for Aging Kathy Greenlee revealed that the steps necessary to make the program solvent are beyond the statutory authority of the department and risk violating the law. The program’s collapse raises additional questions such as why the administration spent so much effort trying to implement a program that contained serious flaws from the outset and why the department failed to publicly address concerns its own officials were voicing.
The CLASS Act was established through the Patient Protection and Affordable Care Act (PPACA) to be an optional, government-backed, long-term care insurance program that requires a five-year vesting period before subscribers can collect benefits. Because of this vesting period, the CBO estimated that in its first 10 years, $80 billion in deficit reductions would occur as a result. These estimated savings were crucial to securing support for—and ultimately passage of—health care reform legislation. Since its inception, however, many experts have pointed to key design flaws, such as the program’s brief vesting periods and large threat of adverse selection, as a recipe for disaster.
The decision to abandon implementation of the program marked a drastic shift from proclamations just three weeks ago by the administration insisting it was not giving up on its efforts on the CLASS Act. Friday’s news left opponents on both sides of the aisle hailing the decision as a policy victory while the program’s supporters were devastated and felt they were left largely in the dark about implementation efforts from its inception. The announcement comes nearly two years after initial concerns about the CLASS Act were raised.
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