Repeal Of ObamaCare’s CLASS Act Is Essential

The House of Representatives is scheduled to vote this week on a bill that would repeal the CLASS Act – the part of ObamaCare that creates a new government entitlement program for long-term care payments.

The program was doomed before it began. Sen. Kent Conrad, the Democratic chairman of the Senate Budget Committee, called the CLASS Act “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would be proud of.”

CLASS stands for Community Living Assistance Services and Supports. It would have paid $50 a day — $18,250 a year — for long-term care services for anyone who had paid premiums for five years. Participation was voluntary, and it was inevitable that the program would attract older, sicker people, sending CLASS into a death spiral. Some estimates concluded premiums would have had to be $3,000 a month for the program to break even. Any takers?

If premiums were more reasonably priced, Medicare’s 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.

The Obama administration concluded in October that it saw “no viable path forward” to implementing the new entitlement program. Since participation is voluntary, it could not figure out a way to guarantee the program would be fiscally sound for 75 years without taxpayer bailouts, a requirement that Sen. Judd Gregg managed to get into the health law.

The news of the program’s demise 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. A recent article lamenting the failure of the program inadvertently admitted the core problem with the law. Howard Gleckman of the Urban Institute wrote in the journal Health Affairs: “[T]he law allowed low-income people to purchase coverage for just $5 a month. That meant that many enrollees could pay just $300 over five years and receive at least $18,000 a year in benefits for the rest of their lives.”

To appease supporters, President Obama vowed to veto any CLASS repeal legislation.

It’s quite clear that if the U.S. Supreme Court were to uphold the individual mandate in ObamaCare – requiring everyone to purchase health insurance – that a mandate to purchase long-term care insurance surely would follow.

Speaker John Boehner is right to bring Rep. Charles Boustany’s CLASS repeal bill for a vote before the full House. Tom Miller of the American Institute advises repeal because Congress “should never leave a partly loaded gun on the table.”

The administration said it never was really that enthusiastic about CLASS — the brainchild of the late Sen. Ted Kennedy. 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 nearly $1 trillion official cost.

Sen. John Thune is sponsoring a companion repeal bill in the Senate. Majority Leader Harry Reid will only bring it up if he gets strong pressure from Democrats in his caucus. Repeal is good policy. A strong showing of Democratic support in the House vote this week for repeal of the provision could spur action.

Budget expert Jim Capretta concludes “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.

“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,” Capretta writes.

CLASS must be repealed in this Congress. This is about even more than creating a new unsustainable entitlement program. This is about the future of freedom itself and what the government can command us to purchase with our private money.

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. If the Supreme Court declares, as it should, that its mandate is unconstitutional, ObamaCare would collapse, just as CLASS has done.

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