The CLASS Act, a government-run voluntary long-term care insurance program that was included in the Patient Protection and Affordable Care Act (PPACA), is one step closer to being removed from the books.
Yesterday, the U.S. House of Representatives Committee on Ways and Means cleared a bill, H.R. 1173, the “Fiscal Responsibility and Retirement Security Act of 2011,” sponsored by Rep. Charles Boustany (R-La.), that would fully repeal the CLASS Act.
In a big win for the Big “I,” the Obama Administration halted implementation of the CLASS program back in October 2011 after deeming it unworkable under the requirement that the program be actuarially sound over 75 years.
This was a classic case of adverse selection because the parameters of the program were such that only those who were already in need of benefits would likely be attracted to enroll, causing premiums to rise to the point where healthy individuals would be discouraged from signing up. This would inevitably lead to insolvency and the need for infusions of taxpayer dollars.
H.R. 1173 is part of an effort by Republicans to ensure that implementation of the program can never begin again. Their worry is that, although the A dministration deemed that portion of PPACA unworkable, it is still on the books and could be implemented in the future if it’s not repealed through the legislative process.
The House Ways and Means Committee’s move clears the way for consideration by the full House, likely to take place in February.
Although there is a companion bill in the Senate, S. 720, the “Repeal the CLASS Entitlement Act,” by Sen. John Thune (R-S.D.), movement in the upper body on this issue is questionable, as Democrats are the current majority party in the Senate and many are reluctant to repeal major provisions of PPACA.
The Big “I” government affairs team will continue to keep IN&V readers posted on this issue as it progresses.