The brouhaha over the CLASS act is continuing since the Obama administration pulled the plug on Friday, saying it saw “no viable path forward” to implementing the new long-term care entitlement program.
Budget expert Jim Capretta concludes in an insightful piece “there was never any shred of evidence that CLASS could ever be made sustainable. Not before enactment, and not since. Indeed, any fair reading of the analyses that were done on the concept prior to its passage would conclude that CLASS was hopeless. And it wasn’t a close call.”
Capretta concludes: “CLASS’s enactment was no accident of a chaotic and uncontrolled legislative process. It was a deliberate and cynical ploy to put a phony veneer of fiscal restraint on top of a massive tax-and-spend program.” The White House, the CBO, and Democrats in Congress had to know this all along.
“It is simply not possible to pay a pay-as-you-go long-term-care benefit to the disabled unless millions upon millions of healthy Americans are forced to pay premiums somewhere in the range of $100 to $200 monthly — for a benefit none of them really wants. There was no way the Obama administration was ever going to propose this, because to do so would have been political suicide.”
If the U.S. Supreme Court were to uphold ObamaCare’s individual mandate as constitutional and if the president were to be re-elected, you can be absolutely sure their next move would be to revive CLASS and mandate that everyone must participate.
And that is why it is imperative to repeal CLASS in this Congress. The issue is one of basic freedom.
Kudos to Sen. Judd Gregg for adding the amendment to ObamaCare that required HHS to demonstrate the program would be fiscally sound for 75 years without taxpayer bailouts before it could begin implementing it. Try as they may, the administration said this wasn’t possible.
Participation was voluntary, and it was inevitable that the program would attract older, sicker people, sending CLASS into a death spiral. Some HHS estimates said the premiums would have had to be $3,000 a month for the program to break even. CLASS would have provided $50 a day toward care expenses for the disabled. Any takers?
If premiums were more reasonably priced, Medicare chief actuary Rick Foster said that 230 million Americans — more than are in the entire American workforce — would have to participate for the program to be sustained.
It’s absolutely clear that the program’s main initial function was to pump up ObamaCare’s financing since it would have collected premiums for five years before paying out a penny in benefits. That initially paid for $70 billion (then $86 billion in a re-estimate) of the health overhaul law’s cost.
The administration is spinning in Politico and elsewhere that it was never that enthusiastic about CLASS — the brainchild of the late Sen. Ted Kennedy. But the news of the program’s demise late Friday afternoon was a slap in the face to CLASS advocates, who knew it was in trouble but were surprised that the program got a death certificate. The president tossed a bone to them on Monday in vowing to veto any repeal legislation. This is a royal mess for the White House.
The Washington Examiner put together a collection of video clips that shows many of the program’s supporters praising the scheme before it passed. The one clip that is missing, though, is Sen. Kent Conrad, the Democratic Chairman of the Senate Budget Committee, who said before the bill passed — and before he voted for it — that CLASS was “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”
Republicans immediately said they would start working to repeal CLASS. AEI’s Tom Miller advised that Congress “should never leave a partly loaded gun on the table, even if most of the chambers are empty or just house blanks.” The House Energy and Commerce Committee has scheduled a hearing for Wednesday to find out why the administration took nearly two years to admit the truth about CLASS’ unsustainability.
CLASS must be repealed in this Congress. It is a microcosm of the problems with ObamaCare. The only reason that ObamaCare pretends to hold together is because Americans are required by federal law to purchase health insurance. And if the Supreme Court declares, as it should, that its mandate is unconstitutional, ObamaCare would collapse, just as CLASS has done.
Government decides. We learned more during the Republican presidential debate on Tuesday night how the individual mandate is playing out in Massachusetts.
Former Speaker Newt Gingrich quoted a Boston Herald news article about a couple who was fined $3,000 by the state because they didn’t have the health insurance the state thought they should be buying.
Lauren and Nick Destito had owned a tree and landscaping business for 25 years before the economy collapsed in 2008. They were forced to declare bankruptcy but still tried to abide by the state’s health insurance mandate, purchasing a policy that cost them $750 a month.
That wasn’t good enough, said the state. The Destitos appealed, but they were told that the amount of health insurance they can afford is determined, “not, unfortunately, from your perspective but from the state agency’s view,” a state officer told them.
That pretty much blows apart Mitt Romney’s claim that RomneyCare applied only to the 8% of people in Massachusetts who were uninsured. An individual mandate, and its enforcement authority, applies to everybody!
A second-day story in the Boston Herald tells us that the state won’t release data on fines and appeals about the state’s mandate:
State officials refused to say yesterday how many families they’ve fined this year for buying too little health insurance under former Gov. Mitt Romney’s controversial health-care reform after blistering criticism from GOP presidential candidate Newt Gingrich thrust the issue into the national spotlight.
“We are releasing the 2009 report at the end of the year,” Health Insurance Connector Authority spokesman Richard Powers said. He said officials haven’t sorted the data to identify why the 2010 and 2011 fines were handed out but said between 46,000 to 49,000 people were fined in 2009 for having no insurance or having less insurance than the state demands.
Massachusetts took yet another hit from a New York Times report on Monday which said “the plan did little to slow the growth of health costs that already were among the highest in the nation. A state report last year found that per capita health spending in Massachusetts was 15 percent above the national average.”
And yet Romney continues to say he is “proud of what we did in Massachusetts.” His Republican opponents were more aggressive on Tuesday than they had been in any of the previous debates in challenging him on what is clearly his biggest vulnerability. They must keep it up in future debates until he gets the point that we know ObamaCare and RomneyCare are built with the same structural plans and that the individual mandate is the most despised part of the law.
I can’t help but put in a plug for our book: Sen. Rick Santorum, who offered the strongest criticism of Romney, told me earlier he read our book Why ObamaCare Is Wrong for America cover to cover. He’s clearly armed for the battles. The other candidates would do well to follow his lead.
CLIPS OF THE WEEK
Grace-Marie Turner on FOX Business
In this video clip, Grace-Marie Turner discusses the demise of the CLASS Act with host Stuart Varney.
Watch now >>
Grace-Marie Turner on Opinion Journal
In this interview for The Wall Street Journal’s live online show, Grace-Marie Turner discusses the similarities between ObamaCare and RomneyCare.
Watch now >>
GALEN IN THE NEWS
Senator Vitter’s Bad, Old Idea
National Review Online: The Corner, 10/19/11
Sen. David Vitter (R., La.) has resurrected a bad idea and is demanding a vote on an amendment he has been pushing for years to legalize the importation of prescription drugs from Canada. We have more than enough problems with health care right now in the United States — including serious shortages of prescription drugs — without opening this highway to potential contamination of our drug supply and violation of the integrity of the supply chain, potentially even inviting a channel for those who are determined to do harm to U.S. citizens. It is time to step up and look at the real reasons that prescription drugs are so expensive: the slow, cumbersome, rule-driven drug-approval process that leads to a $1.2 to $1.8 billion cost and 12 years to bring a single new drug to market. Congress should focus instead on modernizing the prescription-drug approval process to get safe drugs to patients who need them, faster and at a lower cost. The upcoming renewal of the Prescription Drug User Fee Act in 2012 is where Congress’s — and Senator Vitter’s — energies should be focused.
Read More »
A Brawl over Romneycare
National Review Online: The Corner, 10/18/11
The candidates had quite a brawl over Romneycare during this week’s debate. Former Speaker Newt Gingrich brought new information to the debate, quoting a Boston Herald report about small business owners in Massachusetts who were fined $3,000 because their policy didn’t provide the level of health insurance that Massachusetts mandates. That clearly shows that Romney is wrong when he claims his plan impacted only the 8 percent of Bay Staters who were uninsured. The employer mandate affects all but the smallest businesses in Massachusetts, the same as Obamacare. The individual mandate in Massachusetts affects everyone, and anyone who wants to get out of it must make a special plea to the government — just as will be the case with Obamacare. Unless the Supreme Court declares the federal mandate unconstitutional, GOP voters will need better assurances than they have received so far from Romney that he will protect the rest of the country from his Massachusetts-style mandate.
Read More »
The Reconciliation Option
James C. Capretta, National Review Online, 10/18/11
ObamaCare Starts to Unravel
The Wall Street Journal, 10/18/11
Time to loosen left’s grip on medical schools
Dr. Jason D. Fodeman, The Washington Times, 10/12/11
Could Mandatory Caps on Medical Malpractice Damages Harm Consumers?
Shirley Svorny, Cato Institute, 10/20/11
Rethinking Health Care Labor
Robert Kocher, M.D., and Nikhil R. Sahni, B.S., The New England Journal of Medicine, 10/13/11
The GOP and RomneyCare
The Wall Street Journal, 10/21/11
Health-care agency sick
Margery Eagan, Boston Herald, 10/18/11
Massachusetts Tries to Rein in Its Health Cost
Abby Goodnough and Kevin Sack, The New York Times, 10/17/11
Obama’s Plan to Reduce Drug Costs for Federal Workers: Price Fixing
Robert Moffit, National Review Online: Critical Condition, 10/19/11
Authorities perplexed by drug shortage spike
Anna Yukhananov, Reuters, 10/14/11
A regulators view of CER
Robert Temple, Clinical Trials, 10/05/11
MEDICARE AND MEDICAID
World CLASS Contortions
James C. Capretta, National Review Online, 10/20/11
Employment Impact of Proposed Mandatory Part D Drug Rebates
Douglas Holtz-Eakin, Robert Book and Michael Ramlet, American Action Forum, 10/17/11
The First Stage of Medicare Reform: Fixing the Current Program
Robert Moffit, Ph.D., The Heritage Foundation, 10/17/11
Chicago Tribune, 10/18/11
White House Still Wants Long Term Care Insurance Program
Seniors’ Opinions About Medicare Rx: Sixth Year Update
KRC Research/Medicare Today, 10/11
INTERNATIONAL HEALTH SYSTEMS
Why We Wait: Physician Opinions on Factors Affecting Health Care Wait Times
Bacchus Barua, Fraser Institute, 10/17/11
Seal the Borders Against Canadian Health Care
Sally C. Pipes, Forbes.com, 10/18/11
The Affordable Care Act: Challenges to Access, Affordability and Availability
Networks Financial Institute at Indiana State University
Friday, October 21, 2011
8:00am – 2:30pm
Grace-Marie Turner will participate in a panel discussion on “Public Policy Analysis” at 8:45am.
Congressional Field Forum on Medical Device Industry
Monday, October 24, 2011
10:00am – 12:00pm
First National Congress on Health Care Cost Containment
Wednesday, October 26 – Friday, October 28, 2011
Grace-Marie Turner will speak about “The Role of Consumer-Directed Health Care in Cost Containment” at 4:00pm on Wednesday, October 26.
Costly Tradeoffs for Health Benefits: Are Even Lower Wages and Bleaker Futures Ahead?
American Enterprise Institute Event
Friday, October 28, 2011
9:30am – 11:00am