The Obama administration's signature health overhaul law, under relentless assault by Republicans, has suffered its first major casualty - a long-term care insurance plan.
The program, expected to launch in 2012, had been dogged from the beginning by doubts over its financial solvency.
Proponents, including many groups that fought to pass the health care law, have vowed a vigorous effort to rescue the program, insisting that Congress gave the administration broad authority to make changes. Long-term care includes not only nursing homes, but such services as home health aides for disabled people.
Known as CLASS, the Community Living Assistance Services and Supports program was a long-standing priority of the late Sen. Edward M. Kennedy, D-Mass.
Although sponsored by the government, it was supposed to function as a self-sustaining voluntary insurance plan, open to working adults regardless of age or health. Workers would pay an affordable monthly premium during their careers and could collect a modest daily cash benefit of at least $50 if they became disabled later in life. The money could go for services at home or to help with nursing home bills.
But a central design flaw dogged CLASS. Unless large numbers of healthy people willingly sign up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it, eventually requiring a taxpayer bailout.
The CLASS Act was supposed to accomplish three things: provide "free" long-term care for the elderly, burnish the Dems' reputation for compassion, and (most important) provide a crucial bit of accounting legerdemain to allow the CBO to score the overall health care law as being a budget reducer. The part about CLASS being a budget reduction program was especially ludicrous, almost silly, but its consequences were deadly serious for us all
In deep-sixing the CLASS Act, the Administration just forfeited $86 billion in savings on the Affordable Care Act. That’s because the CLASS Act was a net revenue positive in the ten-year window of the legislation, because it collected more in premiums that it paid out in the early years, according to CBO scoring.
So the effective nullification of the CLASS Act costs $86 billion. But it’s unlikely that $86 billion will be made up in any other way. If Congress repealed the CLASS Act, they might have to find offsets. But since the White House just isn’t going to implement the program, the savings won’t be realized but nobody has to worry about paygo or anything. It just blows a hole in the medium-term budget.
Forget everything else, you know there is something wrong with the system when an unsustainable entitlement program can be scored as, not just budget neutral, but as reducing the budget. This is a prime example of the cynic's phrase "the real scandal is what's legal." A lot of folks on the right have mused aloud that, were a CEO to offer the same number of outrageous lies used to pass Obamacare, he would be in Club Fed for life. Not so if you are a member of Congress or the President! Not only do they have legislative and executive immunity for their official acts, but they seem to have a near-bulletproof electoral immunity as well.
Not that this matters to the Left. People are already pitching a bitch over the Obama Administration's "cave." Cave to what? Math? Human nature? Not everything bad in the world happens because of racist Reupblicans, you know.
(Btw, according to this report, Judd Gregg was the one who managed to insert the requirement that CLASS be certified as sustainable over 75 years, which is what ultimately lead HHS to conclude the program couldn't be implemented as drafted. Sometimes those moderate NE Republicans can teach the rest of us a thing or two).
Every Republican in Congress voted against Obamacare. Conservatives rallied nationwide to protest its passage. Joe Wilson correctly, if rudely, yelled out "You Lie!" at some of Obama's most egregious whoppers (spoken at a joint session of Congress). And, most memorably, tens of thousands of people trooped to DC on the weekend of Obamacare's passage, surrounded the Capitol Building, and vigorously protested the impending cram down. For this we were called racist and worse. No, we were worried that a group of people who have no grasp of economic or common sense had seized the treasury and were re-writing some of the most basic economic relationships in our society. Sorry if you are offended when it turns out we were right.
On the other hand, every liberal in the land will no doubt defend Obamacare with all the usual well-thought out arguments about dog food, dead babies, and wearing your sister's dentures. It will simply never occur to them that their crazy anecdotes are not representative of the overall health care system, nor will it occur to them that market-based reforms - such as simply allowing health insurance to be sold across state lines the same way you sell freakin' toilet paper - will do a lot more good than their Brobdingnagian schemes.