House Victory in Repealing the CLASS Act

Wednesday evening the House of Representatives voted 267-159 on the Fiscal Responsibility and Retirement Act of 2011 (HR1173), which repealed the Community Living and Assistance Services and Supports (CLASS) Act. The CLASS Act is the program created by the Patient Protection and Affordable Care Act (PPACA) that provides voluntary, long-term care. CLASS was incorporated in PPACA as budgeting trick to make the bill appear fiscally sound and solvent.

The CLASS Act has been a budgeting scam and implementation nightmare since day one, with actuaries, economists and policymakers calling for its demise. The Act was doomed to fail from the beginning simply based on its design. This is because only those who have the highest health care costs would be compelled to sign up. Further, because the original budgetary outlooks only projected 10 years into the future, the substantial spending increases by consumers were not accounted for. In reality, if consumer premiums were set high enough that the long-term health costs of our sickest seniors could be covered, the healthier individuals would continue to leave the program until average costs increase even more. This trend would continue until only the most expensive people were left and no one could afford CLASS premiums.

Unfortunately for proponents of the bill, even the Secretary of Health and Human Services Kathleen Sebelius said that there is no “viable path forward for the CLASS Act”. Despite this admission from his own Secretary, President Obama has held fast to his claim that he is against a repeal of the Act. The President, who claims to be trying to lower health care premiums for all, is against repealing a provision in PPACA that is proven to be unsustainable after the next decade. Even Democrats who support PPACA recognize the failure that is the CLASS Act, with Sen. Conrad (D., ND.) going so far as to call the CLASS Act “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would be proud of.”

HR1173 was drafted by Rep.  Boustany (R., LA.) who is a physician that has been calling for the end of CLASS for some time. During Wednesday’s full House vote, with 28 Democrats voting alongside Republicans in favor of the bill. Sen. Thune (R., SD.), Chairman of the Senate Republican Conference, is pushing for a companion measure in Senate, but said the measure most likely will not have the 60 votes necessary to pass the Senate. He did say though, that depending on the outcome in the House, there could be a “momentum” change to pressure more Senate Democrats to consider repeal.